Change Is Here to Stay
Despite how difficult it can be to effect change in the workplace and have employees change their mind, we must recognize that few businesses can survive without being able to adapt. Whether it’s from minor changes like reorganizing your team to more major changes like a merger or acquisition, it is natural for employees to resist the new way. Most employees find a change to the status quo uncomfortable or downright threatening.
That is why there is so much change management training and so many have addressed ways to ease and effect organizational change. But it’s helpful to look not only at the macrocosm, but at the microcosm. What happens in the individual employee mind when we face a required change in mindset?
Surprisingly, researchers at the Hebrew University of Jerusalem have learned that beyond simply changing one’s mind, individuals can be persuaded to accept a completely opposite opinion to what they had once believed. According to research, here are some of the major psychological factors that influence the way we think about things and how employees change their mind:
What stands out is that, regardless of the status quo, we can change both our thinking and our behavior. We simply get used to a new situation and, in doing so, can even change our memory and opinion of what happened. For the most part, humans are preconditioned to get comfortable in situations that we once viewed as negative.
The Bottom Line
The implications of the research on why we change our minds have application in the workplace. Leaders who must introduce change that is initially resisted can find that, once instituted, most employees will adjust to the change and even welcome it. The trick is to shorten the time frame and angst as much as possible.
To learn more about how to create better and faster change, download 5 Science-Backed Lenses of Change Leadership
Effective Stretch Assignments
We believe that the ability to continuously learn and grow separates the average leaders from the best leaders. And one of the very best ways to continuously develop yourself – or your team —is through effective stretch assignments that increasingly take you out of your comfort zone. In a nutshell, more complex assignments are great way for people to get better.
If you want to become a better skier, ski harder terrain with better skiers. If you want to be a better leader, take on more challenging work and rub shoulders with people who are smarter and more experienced than you.
The Benefits of Effective Stretch Assignments
There are benefits of well-conceived stretch assignments for both the individual and the organization. For an individual, an effective stretch assignment presents a challenge that can launch them toward new heights in their career. For an organization, the right assignment can be a critical step in developing new in-house leaders to fill your talent pipeline.
For the Individual
What are the considerations for the individual who is presented with a challenging new role or project and for what it takes to succeed? The characteristics of an employee who is ready to accept the stretch challenge include:
For the Organization
From the organization’s point of view, what are the benefits of stretch assignments and the factors that work to the company’s advantage? Effective stretch assignments can be a way to test the abilities of candidates in your leadership pipeline while providing career development opportunities – often at a reduced cost.
To give high-potential employees the greatest chance to succeed, let them identify the right opportunities themselves. Their involvement will ensure that the assignment is something they want to commit to. Work with them to define expected results so you can measure the final impact on both the individual employee and the business.
The Bottom Line
When you give high potential leaders a chance to stretch their wings and grow, they have an opportunity to develop exponentially. While they will most likely experience the initial discomfort of having to stretch beyond their current expertise, the potential gains are worth it. Stretch assignments can be career-making for the employee and leader-confirming for the organization.
To learn more about how to develop your next set of leaders, download Surprising Succession Planning Traps to Avoid for HiPo’s
Efficient and Effective Decision Making Cultures Vary
The location at which companies make decisions – centralized decision making or decentralized – matters. Sometimes it makes sense to centralize decision making from a strategic and cultural perspective. Other times it makes sense to decentralize decision making.
Corporate Culture Defined
We define corporate culture as how and why things truly get done. Culture can be measured by understanding the way people think, behave and work. A company’s culture represents what a new employee needs to learn to be “accepted as a member” and what makes the company “feel and act” like itself.
While often invisible to the eye, culture becomes very apparent when people act in ways that misaligned accepted cultural norms. How a company makes decisions can say a lot about its culture.
Decision Making Challenges
Thanks to the growing complexity that most leaders face, not only has the number of decisions that must be made increased, but leaders also report that it is more difficult to cleanly delegate decisions to their subordinates. A recent McKinsey study found that 72% of senior-executives thought bad strategic decisions either were about as frequent as good ones or were the prevailing norm in their organization. It is not easy to have a strong culture if the way you make decisions is flawed.
So how do you know which circumstances should dictate which decisions?
Centralized vs. Decentralized Decisions
When a decision is centralized, it is typically unilaterally mandated by a central, usually high-level, authority. Decentralized decisions are, instead, made at a more local level by frontline employees who are close to whomever will feel the impact. Neither decision making approach is inherently “right”. The choice of which decision making mode is best completely depends upon the situation and your goals.
When Centralized Decision Making Makes Sense
There are four factors to evaluate where a decision needs to be made and these will help you choose the best mode of decision making for the specific situation.
1. When the Impact is High and the Scope is Wide
When a business is faced with big opportunities, issues or threats with potential company-wide impact, it is often best to have your top leaders make the final decision. In this instance, it is important to have policies and procedures in place to help ensure that there is alignment throughout the organization. For example, one client decided that all decisions with an impact of greater than $250,000 needed to be approved by the CEO.
2. When Standards and Uniformity Matter
Every organization needs to operate with some common standards and procedures. It makes little economic sense to have duplication of effort, misalignment, or inequity. One overall authority in areas such as payroll, procurement, legal, quality assurance, and safety can often improve economies of scale with centralized decision making.
3. When the Long-Term and the Greater Good Matters
While decentralized decision making can help speed the decision making process by empowering the frontline, centralized decision making is often required to create longer term thinking for the greater good of all. Whenever there are shared or limited resources (i.e. the need to hit short-term quarterly targets), the self-interests of each stakeholder can advocate for decisions that may be positive in the short term but have negative longer term consequences. For example, one client made their HR function a shared service center which defunded a leadership development program that was essential to building their talent pipeline.
The Cultural Implications of Centralizes Decision Making
If your company needs to make centralized decisions to best execute its strategy, look for strong and decisive leaders, agree upon what decisions need to be mandated versus autonomous, and delineate your decision making criteria when decisions are announced.
The Bottom Line
While effective leaders must be able to delegate decisions to get work done and to empower employees at all levels, certain situations and strategies require centralized decision making. You will likely still need to actively involve key stakeholders in the process to get buy-in and sustainable results, but do not be shy about mandating some key decisions.
To learn more about effective decision making, download 3 Steps to Set Your Team Up to Make Better Decisions
Ineffective Strategies Hinder Growth
Too many leaders settle for strategic growth plans that won’t work. Why? Because they don’t understand the difference between good and bad strategies, their strategic plans are flawed from the beginning.
Strategies that lack an understanding of the key challenges that need to be overcome, have an insufficient focus, or that take an unrealistic approach are just wishful thinking. The best leaders know not to settle or be fooled by a bad strategy – one that does not represent the hard work it takes to design and implement a good strategy.
3 Signs of a Bad Corporate Strategy
A bad strategy is likely to be loaded with slogans and wishful thinking. A bad strategy:
A Good Corporate Strategy
A strategy that can be effectively followed and that can guide an organization toward a successful future has three fundamental elements. A good strategy:
The Bottom Line
Strategic planning is hard work. Make sure that your efforts to craft a strategy are worthwhile. Effective strategies address the difficulties ahead, focus on the few moves that will make a difference, and set up the aligned actions required to succeed.
To learn more about good and bad strategies, download 7 Ways to Stress Test Your Strategy Now
Decision Making Culture
With the advancements in data analytics and artificial intelligence, more leaders are asking about the pros and cons of a fact-based vs. an intuition-based decision making culture. Why? Because it is the responsibility of leaders to build effective decision making capabilities throughout their organization.
Defining Workplace Culture
We define workplace culture as the way work routinely get done in an organization. Our organizational alignment research found that culture accounts for 40% of the difference between high and low performing organizations. Culture can be measured by understanding the way people think, behave and work along with the known and unspoken values and assumptions that drive key behaviors – especially how and why decisions are made.
Defining Effective Decision Making
While there are many types of decisions, we define effective decisions as those that deliver the intended outcomes and desired impact alongside the right levels of strategic alignment, cultural integrity, speed, quality, trust, and confidence. We have found that there are four common stages to effective decision making:
Two Main Decision-Making Approaches
How your company approaches and makes decisions, especially when the stakes are high and the information is inadequate, describes your decision making culture. We find two primary ends of a spectrum with respect to how companies make decisions – each with its advantages and drawbacks depending upon the corporate strategy. The spectrum ranges from a fully fact-based to a fully intuition-based decision making culture.
A Fact-Based Decision Making Culture
A culture that strongly relies upon facts when making decisions tends to primarily:
Examples of common fact-based decision making cultures include biotechnology, finance, and medical device companies. Even sports teams (think about the movie Moneyball) are beginning to rely more on data to increase revenue, construct rosters, improve player performance, and prevent injuries.
An Intuition-Based Decision Making Culture
A culture that strongly relies upon intuition when making decisions tends to primarily:
Steve Jobs is often quoted saying that intuition is “more powerful than intellect.” Virgin Group founder Richard Branson says: “I rely far more on gut instinct than researching huge amounts of statistics.” There is a growing body of anecdotal evidence and research that suggests intuition is a critical aspect of how many leaders make effective decisions.
Examples of common intuition-based decision making cultures include fashion designers and creative marketing agencies.
Which Decision Making Culture is Best for Your Organization?
First, we do not believe that one type of decision making culture is better than another. It depends on the type of decision being made and on the specific goals of the organization. The key is to align the way you make decisions with the strategy you are trying to execute.
Once your strategy is clear, there are three overarching questions that you should ask to identify the best decision making culture for you and your team. To best execute your strategic priorities, should your decision making methods require:
The Bottom Line
In the end, the process of decision making is both an art and a science. At the organizational level, leaders should agree on the type of decision making culture that best supports the overall strategy. At the decision making level, make sure people know the what type of decision is being made, who needs to make it, why it matters, to whom it matters, and the different roles people will play. Then create a plan to ensure commitment and follow through.
To learn more about being improving the grace, speed, and quality of your decisions, download 3 Steps to Set Your Team Up to Make Better Decisions
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