Organizations are constantly seeking ways to improve their performance and stay ahead of the competition. A key factor in achieving business transformation is establishing the right culture rather than a focusing on results alone. Whether written or not, guiding principles influence behaviors and behaviors establish the culture. In this blog post, we will explore the role of guiding principles in business transformation.
For 25+ years, I worked for a leading Contract Manufacturing and Development Organization. Each biologic and viral gene therapy product has unique processes, methods, recipes, and materials. The business processes and systems employed to develop, manufacture, and release these products require many hand offs across a diverse, cross-functional team. As you might guess, the most complex systems failed more than others. But they also provided some of the best learning opportunities.
How often have you observed a business-critical system failing to deliver actionable results? Problem systems are complex and made up of interwoven sub-processes spanning multiple departments. These business-critical systems enable day to day and longer-term decision making. When not operating as designed, business leaders are unable to respond to changes, pinpoint needed actions, or improve results.
If we want to improve the output for an underperforming system, logically we take action to fix the inputs. A poor output is the sum of all the inputs. When the inputs are poor, so is the output. We take action to improve the inputs by making some improvements to written procedures. We ensure we have roles and responsibilities written down for people who provide the inputs. We retrain everyone. All too often, this effort fails to yield improved results.
The issue is often that we design systems that require 100% compliance with the rules for said system. When the system is not working as intended, we nearly always take action to improve compliance (improve procedures, document roles and responsibilities, etc.). And while we need tools and training to support compliance, often the problem really isn't due to a lack of knowledge about what is required. The cause of non-compliance can be multi-faceted.
For example, most people have more work on their to do list than they can accomplish on a given day. They are faced with making priority decisions for the work they do today and the work that gets pushed to tomorrow. If it is perceived the 'problem system' is never working, or that my inputs have little or no impact on the outputs, most will deprioritize the work related to the problem system. So long as I believe my inputs are of lower value than other work, no amount of training will yield a different priority decision.
People comply with rules and regulations when the authority driving compliance is present. When the authority figure(s) is absent, people do the thing that is easy and/or perceived as low risk or high reward. You might conclude the solution is then to deploy the authority figure(s) to drive 100% compliance. But is that a sustainable solution?
We need to achieve a higher mark. We need to aim for commitment to the system requirements and results. With commitment, we recognize the need for ownership and personal investment in the goal or cause. It's the difference between employing hands only vs. employing hearts and hands.
A fundamental truth is the results of a business process or business system depend on the way its people behave. The collective behaviors of an organization make up its culture. Behaviors that persist are those reinforced and rewarded by management and peers. Behaviors that desist are those discouraged through negative consequences.
Enter guiding principles. Guiding principles for an organization serve in shaping its culture, decision-making processes, and overall direction. They inform acceptable and encouraged behaviors. The also inform unacceptable behaviors. When guiding principles are deeply ingrained in the fabric of an organization, they act as a compass, guiding employees and leaders toward a unified path and end results.
A principle is a fundamental, self-evident truth, timeless and universal in nature. Stephen R Covey, author of the best selling book 'The 7 Habits of Highly Effective People' said "Principles always have natural consequences attached to them. There are positive consequences when we live in harmony with the principles. There are negative consequences when we ignore them. They help in the interpretation and application of values."
Some examples of guiding principles from the Shingo Model are: 'Respect every individual' and 'Lead with Humility'. An organization with these guiding principles would aim to shape its culture by setting expectations for a learning environment where everyone is included, and each person is valued for the ideas and skills they have. The organization will explore ways to improve trust and transparency, how to ensure a safe environment where ideas can be shared without criticism or rebuff, and where leaders ask questions from a place of curiosity and with genuine interest in learning from others.
If your organization doesn't have guiding principles, you are essentially operating without a playbook. The prevailing culture will be a culture of firefighting, where heroics are rewarded, employees burn out quickly and either stay and complain or move on, and where business results are up and down for reasons no one can quite put their finger on.
In our failing system example, an organization with established and engrained guiding principles would likely be able to pinpoint the root cause for the failure. Rather than focusing on driving compliance, they would focus on the behaviors that precede the results. They would aim to understand why there is a lack of commitment to the end goal. What actions are reinforcing the unwanted behaviors? How can we stop the reinforcing actions of the bad behaviors and replace them with actions that encourage a new behavior? How would we demonstrate the behaviors that we do want? How can leadership demonstrate the behaviors employees will want to emulate? And also, how can we make it easy for people to comply with the requirements?
In the pursuit of business transformation, companies aim to fundamentally change the way they do business. While this may encompass innovation, digitalization, process improvement, operational efficiency, growth, and many other things, failing to establish and ingrain guiding principles will lead to lackluster results.
Proven Impact Consulting operates based on the principles of respect for every person, leading with humility, and delivering excellence on behalf of its customers. By partnering with organizations and deeply understanding their challenges, we help clients identify misalignments in their systems, processes, behaviors and results. We coach leaders in how to establish guiding principles and foster behaviors that align with their guiding principles, improving employee engagement and establishing a culture of excellence.
In conclusion, by establishing and living guiding principles, an organization can create a culture of respect, humility, innovation, and excellence. This, in turn, leads to improved performance, employee commitment and engagement, and overall success. I hope you will consider the role of guiding principles in driving your business transformation efforts.
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