Organizational Success

Purpose of an organization is to increase it's shareholder's value. 

It's been a while when I had been off my blog pages, with lots going on around and in country, I thought of getting back to writing down some of my weekend personal thoughts on organizational success and to take your feedback and learn on this subject. These are difficult times, with human crises caused with Covid and the lockdown impacting the livelihood. The human quest for answers and adaptation to fight adversities will succeed in the end.

Getting back to the subject of this blog, so what is organizational success? From what we have learnt from business management studies, the very purpose of an organization is to increase it's shareholder's value, which in turn is determined by organization's financial performance including earnings, profits, free cashflow and dividends. We can of course call it out in many other ways including but not limited to the value it creates for customers, product innovation, on time and first time right customer deliveries, stakeholders satisfaction scores, analyst ratings, market share, differentiated offerings, competitive advantage so on and so forth. But the bigger question is what is the right recipe and the twists needed in current changed and challenging scenario to this recipe of organizational success in ?

In this new world of Robotics, Automation and Artificial Intelligence we hear that the human jobs will be replaced by the technology, but hasn't this been true for last many decades, ever since the first mainframe computer was launched? We do not have Munsi Ji keeping track of the manual ledgers anymore. Typewriters have been replaced with speech/handwriting recognition software. Though the world may not be the same again, but the right skilled "people" will continue to required to bring about the change and the technology shift needed in the fast changing world. Given my area of work experience & background, from here on I will refer people as "engineers" and in the context of organization as "employees". The paradigm technological shift include hydrogen fuel, robotic soldiers, human & touchless deliveries by drones and autonomous flying cars. These would still have to be created and managed by engineers. These engineers / people or "Employees" would continue to be at the core of the technology shift, innovation, growth and would ultimately continue to be key to organizational success.

So what is the relationship between employees and organizational success? Is it all employees or selected few? How to measure this relationship to success? There are many more such questions, but here are some of my thoughts and examples of how key employee roles contribute to organizational success:

1. Customer Facing Employees - brings new business (Earning), manages relationship and responsible for customer satisfaction.

2. Project/Product/Delivery Manager - Ensures delivery within scope, schedule cost and quality constraints and hence is responsible delivery right and profitability of the project that ultimately rolls up to the profitability of the organization.

3. Project/Product Team Members,: they form the core building block and have the most important role in the chain. Also any "leader" is as good as the team is. Unless this team has the right skill and is motivated, the two roles leading up cannot succeed.

4. Support Function Employees (HR / Quality / Admin / IT / Finance): Their customers are the above internal employees. satisfaction of whose determines the success of organization. This function, where they ensure success of their internal customers is very critical where rest of this article would mostly focus on.

5. Leadership (CxO, Unit heads): Yes, I have put this last in the order on purpose. A correlation, without getting into politics, would be the "Pradhan Sevak" title that current prime minister of India gave himself. Leadership definition in principle is all about being able to influence "people" (Employees) without having the formal authority or using the directive power. Inverting the pyramid, removing the boundaries is the need of the our more so with fast changing demographics in employee composition of an organization.

Inverted Pyramid

Reversing the organization structure with inverted pyramid is customer centric concept that empowers the customer facing employees with rest of the organization working to support them. An example, at outset, even though military is strictly an hierarchical organization, when at war, it functions in an Inverted Pyramid model where the infantry at the front is supported by arterially, army engineers, logistics, Air Force and the central command ensure supplies, provides strategic guidance in interfacing and interconnecting the infantry in front lines. This example under current challenging circumstances for an organization is more relevant where the entire organization should work towards empowering and supporting the frontline employees. This will result in enhancing the customer focus, bring higher wins, help flawless delivery and take customer relationships to next level. This function structure significantly increases the chances of winning and which is the key to organization success.

Making CEO office redundant by Enabling, Empowering and Enthusing Employees to be the entrepreneur of their own span in given organizational assignment. In one of the leadership sessions Simon Sinek quotes "A Leader's job is not to do the work for others, it's to help others figure out how to do it themselves, to get things done and to succeed beyond what they thought was possible". Some thoughts on how it can be achieved include:

1. Organizational Vision: The organization vision is the first and foremost item that bonds the employees and entire organization together. In current times, if required, this must be restated and recommunicated. This has to be short, crisp and simple enough for the employee at all levels to be able to understand and relate to. This brings about focus and gives right direction to the passion & energy thus Enthusing every employee. The articulation has to be such that it gives every employee a purpose.

Organization culture determines the mindset of the organization either it will makes team run towards the goal come whatever storm it faces or you would see average run of the mill alignment. Smaller organizations have an advantage here in being able to change and rescript the cultural change but who says “Elephants can’t dance”.

2. Organization Culture is the the next key element of success. The culture must be built on the model of "Trust through Transparency". Creating the culture of trust within the organization would reflect the same with customer. Build this culture of trust in larger organization will have to reflect from leaders flowing it down to every level in the organization with right empowerment. One can also use tools like publishing 360 degree feedback with entire organization. In difficult times, an open communication that we will not let go of any employee but will tighten the belt to sail thru. Transparently communicate the need and rationale of the tough measures taken with timelines / conditions on reverting the same.

In one of the interviews with Anand Mahindra, who also has one of the highest twitter followers, talks about how Twitter is changing the organization culture. He cities that in this social media information age, he is able to know what is happening in the organization and communicate with the employee at remotest of the locations faster than it would ever come thru formal communication channel. It is important for the CEO to encourage this culture of transparency wherein the lowest of the employees can reach him with trust.

The CEO, can look at building an ever active social medial like platform within the organization as well where any employees can reach him/her directly. This will help him stay connected, get unfiltered view of the organizational pulse and plethora of ideas for future strategy to achieve the vision / mission of the organization.

3. Empowerment of employees, if rightly done, can be the growth multiplier for an organization. By infusing the spirit of entrepreneurship in the employees the contribution and involvement even in difficult situations would be much higher than normal. The implementation has to be well thought out to avoid chaos and achieve intended behavior. In this model, faster / timely decision taking behavior must be encouraged as 9 out of 10 times the decision taken in a timeline manner is always better than a well thought out planned decision which is delayed. For right organization culture, a wrong decision in right spirit should not be penalized but appropriate framework must be put in place to empower and enable right decision making and implementation. 

In current covid impacted business scenario, it would requires crises management approach and well calibrated response for sustenance and at times even survival of the organization. Situational Leadership requires adaptation. Also, unnormal circumstances would require central decision making for better control and calibrated response to the situation. However, it must be done only in exceptional scenarios and only for short period of time. In long run it would slows the organization and impact the customer experience. Distributed decision making structure, with well defined transparent framework, helps organizations succeed and grow.

4. Enable Employees: The HR recruitment function must enable brining in new talent and enable employees deliver to the vision and mission of the organization. Finance function in brining in the right business model and measurements, Training function to facilitate upskilling and cross selling, Admin to support the infra and operations. But the focus of these functions has to be enabling their customers "the employees" with and integrated seamless services experience. The policies and tools has to be developed around this theme of inverted pyramid and enhanced employee experience thru the enabling functions. An happy employee, directly translates to happier customer.

To summarize the basic ingredients for organizational success with paradigm shift of structure by inverting the pyramid, building organizational culture of trust with transparency, empowering employees and improving employee satisfaction with enablement and enhanced employee experience. Based on the market environment changes, organizations have to dynamically adapt, just like the sector rotation strategy an investor adapts in share markets. Success is about pushing the envelop much above & beyond the possibilities of comfort zone taking employees together in this journey as one team.

P.S: Some of these thoughts here would also be a reflection of my learning influenced from Vineet Nayar, whom I follow and have seen in action.