Is Your Organization Getting in Its Own Way?

Are you frustrated by your organization’s inability to get done what needs to get done??

You are not alone. Many companies, despite having done what I recommended previously — setting a direction for the company; clearly communicating that direction and the reasons for it; setting relevant goals and objectives for their people — not to mention working hard to hire the “right” people and spending a fortune on culture consultants and coaches, are still seeing no change.

But why? The answer is often so simple and obvious that it is hard to see: Your organization prevents people from doing what needs to get done!?

Bureaucracy, review processes, and more, all keep people from accomplishing the work they have been tasked to do. The solution is something called the enabled organization.

What is an Enabled Organization?

This is one in which all individuals are permitted and authorized to get things done. It has the following necessary characteristics:

#1. There is a mutual understanding of the desired goal, objective, or outcome.?

Whether empowering an individual, a team, or an organization as a whole, a key first step is ensuring everyone involved is clear on whatever it is to be done. This requires unambiguous, concrete communication, confirmed (when working one-on-one) with probing questions to test understanding. It is harder and takes more effort to achieve this with a group of people than with just one person.

#2. The charged person has the time necessary.?

As a supervisor, manager, or leader, effective empowerment requires an understanding of both how much time is involved and how much time or capacity an employee(s) has. Here as well, a mutual understanding of what can and cannot get done in a resource-constrained environment is critical.

#3. The charged person has (or has access to) the resources needed.?

When I was in the rent-a-car business, I wanted my accounting staff to work with the people in the field. Not surprisingly, that meant leaving the office, getting on a plane (usually), and spending money to go somewhere. No approval was needed to travel. However, we did have controls: My boss's secretary arranged all travel (yes, the days of secretaries and travel agents) and I approved all expense reimbursements. She knew where everyone was; I knew what everyone did. Simple and effective.

On a much larger scale, I once met with the Director of Corporate Capital Planning for a Fortune 50 company as part of an exploratory interview. For this capital-intensive manufacturer, I was expecting someone who reviews and approves capital projects from line operations — he didn't do that at all. Line operations could spend up to the amount of their approved planned capital on whatever they wanted, often hundreds of millions of dollars.

This Director's job was to coordinate with Treasury to make sure there was cash on hand to pay for it all. Operating groups were held accountable, however, for return on investment — they were expected to have their own review and approval process. The operations strategy and planned capital projects were vetted once a year in the annual planning process. Not having money was never an excuse for poor financial performance.

#4. The organization understands that the charged person has authority to do what they are charged to do.?

Getting things done in an organization requires the help of others, including advice, facilitation, and granting access to resources. If the organization hasn't been told that a given person is charged with a task and is empowered, they won't get the help they need. In my rent-a-car company, everyone knew the staff could travel. In the Fortune 50 company, there were formal plan reviews and approvals.

#5. The charged person knows what they can't do without proper permission or approvals.?

This can be a tricky balance, because while people under a tight leash of process and controls are not empowered, the opposite — a lack of process and controls — always leads to nasty surprises. For the enabled company, the need to exceed limits is an exception, not the norm.

A common approach is a formal “limits of authority” policy . For example, limits on signing requirements for a check. To ensure the barn door has not been left open, additional limits on dollar amount and terms of sales contracts, purchase orders, and the like are also useful.

De facto limits work as well. In the rent-a-car business, all customer service representatives had the capability to give away the rental to make a customer happy. But, they couldn't issue a credit greater than the rental amount.

Some companies even use osmosis. I attended a talk by a Four Seasons general manager on how they deliver exceptional customer service. One of his tools was minimal controls on employees. All were empowered to say yes to any request, provided the request was not illegal or immoral and the customer was willing to pay for it. Since this talk was to a group of CFOs, there were lots of questions on controls. The basic control, the general manager explained, is well-trained employees. Interestingly, at the Four Seasons, there is limited formal training; employees learn from more senior employees by observing what they do. Osmosis.

Putting Empowerment Into Practice

A few tips…

Empowerment works best with strong, capable management teams and employees.?

Organizations with weak employees and management need strong business control systems to minimize poor judgment and mistakes. But too tight a control system will prevent employees from getting their jobs done.

You need to really mean it.?

If the individual or group's decisions can be overruled from above, and for whatever reason you need to be able to overrule them, don't ask them to do that.? If you doubt an employee or group's judgment, execution capability, etc., ask them to do something less that you think they can do. Empowerment does need the opportunity to fail.

Hold status update meetings.?

Is the effort likely to take more or less employee time and more or less other resources than previously expected? Does it seem the organization understands what the employee is trying to get done, so other employees can facilitate rather than obstruct?

In your status update meetings, validate that you and the employee are on the same page as to the desired outcome, that the situation hasn't changed (and if it has, agree on how it's different), and that the employee still has the time and access to the resources needed.?

A strong internal audit function is critical.?

An independent test of business and financial controls prevents surprises. In the Fortune 50 example above, the company had a large internal audit group that vetted the business and financial control systems of the operating groups. By adhering to the principle of "what is expected is what is inspected," those systems and controls underwent a periodic review from outside the operating group.

True Empowerment is More Than a Catchphrase

Empowerment is often thought of as a trite buzzword, because while frequently proclaimed, it often leads nowhere.

But real empowerment doesn't happen with the stroke of a pen; it demands ongoing, focused work and attention. Most important, it requires desire and commitment from the top of the organization.

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Charlie Goodrich is Founder and Principal of?Goodrich & Associates, a management consulting firm that specializes in helping its business clients solve urgent liquidity problems. He holds an MBA in Finance from the University of Chicago and a Bachelor's Degree in Economics from the University of Virginia and has over 30 years' experience in this area.