LECO cycle as continuous improvement of Organizational Culture

Last three years is challenging time for all of us, but Challenge always means also Opportunity for Change. It depends on us.

Speaking with Leaders of various Organizations, main topic was “How to manage companies to adjust immediately to markets` reality, how to react quickly and flexible to threats and take advantage of Opportunities which appear unexpectedly?”. We have spoken a lot about external factors which have influence on our business activity and we have agreed that we do not have influence on all of them as they are very variable and uncertain.

So, what can we do to defend our Organizations?

Sometimes we cannot do much with external conditions, but as business leaders we can definitely do a lot when we focus on internal issues. The factor that distinguishes best companies from average or weak ones is ORGANIZATIONAL CULTURE.

Organization is a system of connected elements as: trust, conflict management, feedback culture, commitment, cooperation, accountability, delegation, decision-making process, process and result orientation, communication and leadership model. All those elements together create Organizational Culture with behaviors not only as a team, but also as each individual member.

When talking to one of my clients about improvement of quality management systems, I was inspired by the Deming cycle (PDCA (Plan, Do, Check, Act)) - a cycle of continuous improvement of the organization. I was wondering what`s the cycle of continuous improvement of Organizational Culture would look like.

Analyzing the components determining the Organizational Culture and the connections among them, I would distinguish the following groups of stakeholders: Leaders, Employees, Customers and the Organization, which are in constant motion, continuous communication, influencing each other.

That`s how appeared LECO cycle (Leaders, Employees, Clients, Organization). Leaders are responsible for vision, planning and strategy, and through their leadership style, they influence Employees who implement the strategy by caring for Clients. Customers check the strategy in the form of responses to the company's offers and providing feedback to the Organization. Organization, depending on customer`s feedback, takes action and influences the Leaders, defining goals in the context of the vision and mission of the Organization and gives direction to the overall activities. What drives the entire LECO cycle and is the link between the dependencies of the system elements is the Organizational Culture prevailing in the company and behaviors of its individual members.

The foundation of Healthy Organizational Culture are values and behaviors of Leaders and their influence on Employees. What can happen if relation between those two groups will be broken? How it can affect the whole cycle? High volatility in the market, emerging crises and the resulting fear of failure, panic due to high volatility have distorted the LECO cycle in part of the organizations. Leaders in such organizations have reduced care for employees, their needs and their development, treating them primarily as a cost center. Putting employees aside was revealed by deteriorating communication, reducing the delegation of responsibility for the centralization of decision-making, a decline in agility and decision-making quality, a quit from feedback as a development tool - this resulted in a crisis of trust and a lack of psychological safety in the organization. Referring to the LECO cycle - this action resulted in elimination of the "E" (employees) being kicked out of the LECO cycle. As a result, the LECO model was replaced by the LCO model, the dysfunction of which can be observed in some organizations as a Low Cost Obsession.

The obsession with low costs (not to be confused with optimization, which is always desired process in the organization), results from the fact that by throwing out "E" (employees) from the LECO cycle, companies have abandoned the values that differentiate the company on the market, they have thrown away not only the concern for employees, but with it – customers` care and the only thing they can compete with are costs. LCO model is also a Lack of Cost Ownership – when employees will feel like being excluded from Organizational Culture cycle and feel that they are the main element of cost reduction.

How to maintain Healthy Organizational culture, especially in difficult circumstances? As a leader, create Psychological Safety in Organization for all its` members.

In healthy and strong Organizations there are:

-??????Trust&Credibility,

-??????instead of Conflicts there is agreement to disagree,

-??????Feedbacks are often and openly given and treated as a gift,

-??????Employees do not have fear of mistakes, treating them as a way of growth,

-??????Everybody is involved and has space to share their opinions which creates true motivation and commitment,

-??????Not having fear of mistakes and being accepted to disagree, members of organization cooperate more efficient, are accountable for results and treat delegation as efficient way of ?decision-making process,

-??????Effective Communication of the process above,

-??????Last but not least – Fun from the process of growth.

Having all those elements and focus on process, Organization create culture of continuous improvement – it`s true Mastery Orientation by everyone involved, every member of LECO cycle. This is the way, we all go through the crisis stronger, happier and closely connected, creating a fundament for healthy circumstances and for business success. ?