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Building Effective Organizations

A true story from the business trenches

Copyright 2001, Dorian Scott Cole

How do you get everyone going in the same direction, communicating, and productive?

A few years ago, one of the world Fortune 10 businesses had a medical sales/service district doing $2.5 million in revenue, and supporting $16 million in other medical products businesses. But the entire business was getting a tarnished image and its business blown out of the water because within the district were a number of hard to resolve business problems and a number of people who were constantly shirking their work, blaming others, and in constant conflict.

Customers were dissatisfied with this pioneer to the point of switching to competitor's products. This had gone on for years. There didn't seem to be any way to resolve the problems, they couldn't get rid of the people without destroying the business, and when new people were added, they soon became like the others. These were mostly college graduates in a typical big-city political finger-pointing - blame everything on somebody else and do nothing to fix the problems environment.

This business gave the district to someone who had experience dealing with similar problems. How long did it take to resolve the problems? Two weeks. Just two weeks later the problems were gone, people were working together, customers were happy, the problems didn't come back, and profitability rose. No heads tumbled, no troublemakers were fired, no one was even threatened or pressured. Two months later the very surprised ex-manager asked, as a compliment, how this had been accomplished.

I never did tell the ex-manager how I did it - he was too busy plotting sedition and starting a competitive business to understand. Actually I can't tell anyone exactly how to create an effective organization, but I can pass on some proven real-world experiences that provide important ingredients in the "secret sauce" for creating an effective organization.

First, it helps to understand that most people really want to do a good job. It really helps to understand that at least 80% of people are trying hard to do a good job and are not trying to put anything over on you. There are sometimes up to 20% of people who need extra help with their work or who have business problems or other problems that often can be solved. If they have attitude problems that have nothing to do with a business cause, they just need to leave.

Of that 80%, those in the top 20% will consistently deliver more than they have been asked for. These are considered the "cream of the crop." These are the people who bring superior service and innovative ideas to a product that set it apart and create additional sales opportunities.

This is the way people really are - you can count on it. If people aren't delivering, then there is usually a business problem that needs to be resolved.

The second item is actually the most important key, and that is to provide a healthy atmosphere in which people can thrive. There are a variety of leadership styles, but a good style will create a healthy atmosphere. An ineffective leadership style creates a corrosive atmosphere that destroys the organization.

Here is an example of the kinds of problems a corrosive atmosphere causes. Consider the leader who has no idea what to advise to people nor how to work with people. This business had a lot of these. They typically were shooting stars who got quick results and then moved faster than their mistakes, and they left behind a trail of destruction. After a while the pattern was easy to spot. They are often people who do a very good job and then are promoted to management to pass on their good traits, but they simply have no clue how to work effectively with people.

Many leaders seem to have unreasonable and vague expectations. They often are very critical of others and pass around a lot of blame. They don't communicate well. People don't know quite what to do, and live with anxiety over their work because they feel it may not be good enough, since they don't understand the expectations. Anytime something goes wrong, the leader is quick to find the responsible party, criticize and blame. Even the people who are delivering more than is expected from them get criticized because they are "working on other things instead of the product." After a while, blame simply gets shifted elsewhere, and no one will take responsibility.

When things are going wrong in an environment, whatever the cause, people become passive and little work gets done. They hide from work since it not only isn't rewarding, it is discouraging. If work isn't done, the excuse is, "It's because someone else has caused a delay," or "There is a problem with the system." Inevitably conflicts arise, and with this mounting tide of distrust, criticism, blame shuffling, and conflict, it begins tearing down the organization.

People have difficulty overcoming obstacles, but won't turn to anyone for help for fear of being judged incompetent or because they don't want to work with others. People begin to hate to go to work, don't enjoy their work, and leave early. People become passive resistive or passive aggressive so no work gets done unless it is forced. Each request requires force to get it done. Productivity tumbles. People are unhappy and leave. For the manager it is like trying to push a rope - nothing seems to get done. I witnessed two mass exoduses at this business that resulted from unresolved business problems and a corrosive environment.

The last two overbearing and ineffective managers I witnessed were in the software business. The first started the business with his own money. He began every engineering meeting with, "You're killing me! The product is late. You're killing me!" His people worked, but they didn't produce - they killed him. After months of pushing, he finally got his product out the door six months late, but with fewer features and it missed the market opportunity - they closed the business.

The second manager grumbled continuously about all of the other people in the business, blaming them for this or that, judging them incompetent for what they were doing, criticizing every move that they made, while extolling his own virtues. He created such a division between his group and the other groups that none of them were willing to work together. He simmered in his vitriolic stew, plotting sedition and rebellion, while the organization festered and rotted around him.

In contrast, a healthy atmosphere promotes the best from people, without pushing... or pulling. Effective leaders really don't have to push or pull. It isn't a question of "How do we get it out of them" but a matter of providing an atmosphere where people will do what they naturally do. In the right environment, people flourish. They deliver, they more than deliver, and they respond to business needs. It requires leadership, not leverage.

A healthy atmosphere is fault-tolerant so there is no criticizing and blame placing. Everyone makes mistakes, especially in a startup where much less is known about markets and operating environments. When people make mistakes, they feel badly enough about it, and want to avoid doing it again - they don't need criticized, blamed, publicly humiliated, and bruised. If a mistake was made, and the cause isn't clear, then it can be discussed in a non-threatening (not critical, not blaming) atmosphere to find a way to prevent it from happening again (otherwise in a blame oriented atmosphere, blame just gets shifted).

In a healthy atmosphere, people feel free to get advice and ask for help. Difficulties get resolved much more quickly and the product gets developed sooner.

Healthy atmospheres are not lax atmospheres, but are actually demanding. Expectations about "what" and "when" are very clear. People want to know, and they want to deliver. Their is high interest and excitement, and high productivity.

In a healthy atmosphere, managers listen to their people about the difficulties they are having, and resolve the business problems so they aren't obstacles to getting things done. Managers enable others primarily by removing obstacles, and empower others by creating a healthy environment.

In a healthy atmosphere, people communicate freely and explore issues so they are well understood by both sides, and the issues on both sides are understood. Everyone knows what is going on, and respect, trust, and confidence are high.

When people aren't producing, in a healthy atmosphere managers listen carefully and uncritically to people's problems and difficulties. While people are hesitant to initiate difficult conversations, they usually want the problem resolved as much as the business, and will communicate about it when the atmosphere is non-threatening. Ignoring good people is expensive. They leave and have to be replaced.

Problems and personality conflicts always arise. But in a healthy atmosphere they get recognized, usually resolved, and they don't stop the train.

The real secret sauce: It is difficult to stop people in a healthy atmosphere from being productive. It is like standing in the way of a train. (The most effective way to stop people is simply to create an unhealthy environment.)

Managers create a healthy atmosphere by preventing criticism and blaming, listening closely and openly (without criticizing), communicating and keeping communications wide and open, and resolving problems.

There are five fronts that I work on to resolve problems. The principles that I outlined above are effective in preventing organizations from going through these problems, but turning them around quickly sometimes takes a bit more doing.

The five fronts that I work on are:

  1. Healthy environment
  2. Clarify expectations
  3. Identify and resolve business problems (there usually are legitimate problems that people are complaining about, or are causing them problems and they really don't know the cause)
  4. Get people involved in the solutions
  5. Attitude Change

To begin, I go talk to all of the people in the organization individually and find out what they are complaining about, worried about, sick of... It takes a while, just listening - first you have to hear all of the complaints about other people, and all of the misperceptions each person has about the business situation, all of the personality conflicts, all of the unreasonable expectations placed on them, all of the business problems that stop them from doing their job, etc.... I don't argue, justify, or do anything but express interest in resolving their problems. After a while you begin to see what is really bothering people. Sometimes it is difficult for an existing leader to do this because people may not be as open. It's difficult for someone within the organization to do it without being considered a "snitch."

1) Healthy environment: This was discussed earlier in this article.

2) Identify and resolve business problems: When people see that the leader is committed to resolving the problems that prevent them from working effectively, they stop complaining, their hopes rise and energy for their work increases, and they become productive. Of course it is very important that the business problems actually get resolved.

3) Clarify expectations: This was discussed earlier in this article.

4) Get people involved in the solutions: Getting people personally involved in working out solutions brings a huge level of commitment to working together to make the organization effective. People stop being appendages to the organization that have no personal commitment except to stand aside and criticize, and become vital and integral parts of making things work.

5) Attitude change: There are typically some personal reasons why people don't work effectively. While changing attitudes isn't necessarily essential, it is a key reason why I can change things very quickly. It is one of the keys to raising all employees to a high level of productivity and growth. While talking to people in a non-threatening environment, they will usually find a way to tell you of anything they don't want to do by couching it as some other problem. I don't argue with them - it is self-defeating - it just hardens their position. Instead I listen sympathetically and look for the underlying root of the problem. Once identified, then I look for ways to help remove obstacles to their motivation so that their objection to doing something diminishes and then I help them do it, in the process overcoming habit and residual negative feelings or negative Images. If the person has a personal attitude problem about working in general, there is very little more beneficial for both than a brief probation period followed by a quick exit (or just a quick exit).

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Author, Webmaster e-mail: Dorian Scott Cole
Copyright © 2001  Dorian Scott Cole
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