Organizational Vacuums Eating Your Time & Dollars
Do you attend meeting after meeting with nothing to show at the end of your day? Is the annual-review process a dreaded exercise you take part in just to appease your boss and your HR department? What does your budget look like? If you find yourself lobbying for the same dollars to fund the same projects year-after-year, you may feel stuck with a case of bad deju vu. Much of work-place apathy comes from the feeling that comes from doing the same thing over and over without producing anything of real value. It doesn’t sound like a good way to spend the majority of your life. In fact, Einstein calls it insanity. If you feel this way, first, know that you aren’t irrational! It’s more likely that your organization lacks results-inspired internal processes.
There are several institutional practices that have become somewhat of a tradition in organizations of all sizes:
Performance reviews, and
There are several institutional practices that have become something of a tradition in organizations of all sizes: meetings, performance reviews, and budgets. If you find yourself doing any number of these things without real outcomes or ROIs, they become a waste of time and money. With good planning and thoughtful analysis, these practices can be transformed into opportunities that achieve real results for organizations. Bonus, you and everyone in the organization will feel more excited about your job.
There’s literature by Return Leverage and others about meeting management and productivity. Meetings are a known issue inside organizations. It can never be expressed enough that meetings should have outcomes. To my way of thinking, the only reason to call meetings is to make decisions. Because if the goal of the conversation is just to share information, you can send out an email that someone can read in two minutes at their leisure. When you want to share information of a really confidential nature, that’s another appropriate time to call a meeting with a small group. But, other than that, the major reason to meet is if we’re at an impasse in our project, we need to make some decisions, we need to hold people accountable for actions, and execution needs to happen. Essentially, we’re trying to decide what we should do, how we should do it, when we should do it, and then who should do it.
If ultimately projects and work are completed to move organizations closer to their strategic goals and vision, then meetings that don’t move that direction are a waste of time and energy. The takeaway is this: know why you’ve called the meeting, and then ensure that the group assembled is small enough to arrive at a decision, yet large enough to understand all issues inherent in the problem.
Performance reviews can take thousands, if not tens of thousands, of hours to do depending on the size of the organization. So, if they don’t produce the right outcomes, then the company, the manager, and the employee don’t get a return on that time. Most often the performance review, and especially if it’s annual, is such a short-term review of a long period of work that it can be more of a morale buster than a booster.
Effective performance reviews do the following:
- Drive the behavior you want.
- Create the culture you want.
- Provide the opportunity to develop people as assets.
- Enhance the talent of your workforce.
- Give your team(member) the authority to get things done.
- Give your team(member) satisfaction in accomplishment.
Ideally the organization drives the performance review because the practice truly inspires the direction of the company. It’s how you measure your people, and your people help drive the organization’s strategy. If the organization doesn’t act and simply doles out the command to complete the review; however, the responsibility rolls down to the team-manager level to lead. In this case, the team leader or manager needs to identify the organizational and team strategies, and then reconcile the review process against that strategy. They should ask themselves, what is the purpose of the performance review, and what behavior do we try to reinforce? Is the review only done to appraise achievement to determine compensation? Is it to determine how to get the most value from your people? Is it to assess the strengths and weaknesses of the team and individual team members? If you don’t know what the performance review seeks to accomplish, then the review itself is unnecessary. Or, it may be necessary, but the design is flawed because the outcomes it produces don’t align with the higher strategy and mission.
When the goals of the performance review are known, the manager or the organization can adjust the process to align with and to produce those desired outcomes. A tech organization that values innovation and seeks to stay on the bleeding edge, for example should have a different annual review design and appraisal process than a company with the expressed interest of uniformity and maintenance, such as utilities. Members of organizational leadership (whether in HR or another functional area) should be mindful of the results of each review and how those are or are not in harmony with strategy. Develop questions, adjust the frequency of, and determine appropriate metrics to measure and then consistently reconcile the results with the expected outcomes. Did the performance review give us what we hoped for? If yes, then you’re on the right track. If not, then go back to the drawing board.
Retaining and managing resources is a risk. Make the risk valuable by developing your internal assets so they can help you get closer to your goals and objectives. The employee review process is an opportunity to learn about your people. If you don’t know what you’re trying to learn, and you don’t know the outcomes that you’re trying to produce, you don’t know if you’re moving closer to or farther away from that target. Take a strategic approach so as to not waste the practice.
Budgeting is the allocation of resources, so it really does affect the bottom line and the future of the organization. A slight change to the allocation of resources can have massive consequences. The problem with the traditional budgeting approach is that fiscal and human resources tend to go to existing programs or lines of business because it’s safer, it’s easier to justify, and the potential outcome is well known. Teams and organizations often avoid the unknown even if a new line of business is the future. Organizations need to be willing to cannibalize to some extent. If they stay still they become stale. New projects avoid this stagnation, and should be thought of as research and development, or R&D, rather than a gamble.
To take this risk (or opportunity), it needs to be accounted for in an organization’s budget. Teams’ budgets should reflect an R&D-approach, and apply ten to 15-percent to what are considered “flyers.” Projects that say: “Let’s go figure something out. Let’s go explore. Let’s take a lot of small risks and learn information.” It’s not a cost, but a way to create new data in areas that the company’s interested in. It’s a purchase of information. Even if you don’t pursue the project to fruition, you learn something about your customer and the market in the process.
From there, you can make a better decision about whether or not it’s the appropriate way to go. The author Jim Collins, especially in his book Great by Choice, talks about companies that take these small experiments. They learn bits of information, test the waters to prove that interest exists and that the idea’s viable, and then they go in in a big way. They don’t bet the company beforehand. So, the budget should reflect and build in room for that kind of activity.
Before teams embark on experimental projects, they should also have a very good way to measure the outcomes of those projects. It’s not simply about putting money out there to create data. Somebody actually needs to follow-up and analyze the data. And, even before that happens, there should be metrics that the projects tracks. Otherwise, the person who does the analysis doesn’t know what to measure, what to aggregate, and what to scrutinize.
Proper analysis says:
- What does this mean?
- What can we do with it?
- What should we do with it?
It’s then up to the organization to reward people for taking small risks. If you want growth to happen, allow the smart people you’ve hired and entrusted to work in your organization to take small, managed risks. Reward success and don’t penalize people when mistakes happen; instead, pause and reflect. Ask, did we learn something, and did we collect valuable information or data? Even if the preferred outcome didn’t happen, and execution of the project went well, that’s worth celebration. Penalize only stupid risk. When the risk-reward ratio is out of balance or if the risk didn’t produce any outcomes (due to poor front-end planning).
The most powerful transformations result in noticeable impact. The best way for organizations to (re)-engage their talent is to make the work they do matter; set outcomes and deliverables, track and measure, and celebrate learning opportunities. Most companies focus on the large-scale changes, without understanding the impact that changes of the day-to-day. Instead, start with the small changes so people care enough to buy into the big ones. Take an outcome-based approach to the design of these three institutional practices and watch what happens.
Jeff Hadley is a highly curious person with a background in finance; accounting; and risk-governance, analysis, and response. His decades’ experience in internal audit and finance drives his interest in outcome-based strategy, execution, and accountability practices. Ultimately, he says, that’s what internal audit is: identification of strategy and then reconciliation of plans, projects, goals, and measurable metrics against the organizational approach.