What characterizes a resilient organization?

Today’s fast changing business environments demand resilience from organizations in order to be successful. Resilience is the ability of a company to withstand external changes on the one hand without needing to specifically adopt to the changing situation and on the other hand to be flexible enough to actively react to new developments. Resilient organizations are therefore both: stable enough to withstand and flexible enough to adopt.

The question this blog post will try to answer is what differentiates a resilient organization from the ones that do not survive in changing environments?

One important characteristic for resilient companies is diversification. The organizations that survive the longest in business constantly question their portfolio of products, services or targets. External changes can make former bestsellers obsolete and new developed products might be disregarded in the possible opportunity they might be, by favouring the known products and lack of entrepreneurial spirit. External changes affect all organizations, the one who react fast but well thought out survive and profit from the situation.

To take advantage from external opportunities and to recognize changes in the business environment before it is too late an organization has to have a good outsider view. Active surveillance and analysis of the environment simplify innovation and investment decisions. Furthermore, these analyses provide an early warning system to detect changes faster which can be a key advantage, especially in difficult times.

Technologies to optimize organizational effectiveness can be implemented in every company. If every company can use the same techniques to be more efficient, the crucial strategic resource, deciding over win or lose, are the employees. Therefore, having a strong company culture which promotes resilience, flexibility and change is necessary to be successful in the long run. Growth potential from within the company originates from an actively shaped culture of openness and dialog. In a culture like this ideas from internal sources have the highest chance to be implemented. But company culture today goes beyond internal culture. Today, organizations are not only submitters of information but can also receive feedback and ideas from external sources. Social media offers new channels of interaction which can be used to improve the company culture, portfolio, reputation etc. Thus, an open organizational culture is not only an internal matter but rather as well an external topic today.

Simplification of internal structures is a big share of what makes a company resilient. A simple structure is easy to modify, reshape and customize in new situations. Especially when fast action is necessary for example in crisis times, simplicity comes in handy as fast decisions can be made based on sufficient overview over the company internal implications of the changes. Non contemporary and/or overgoverned processes should be reduced as much as possible to increase the company’s flexibility and thereby it’s resilience. Simplicity results in transparency which leads to easier and better decision making. Furthermore, simplicity enhances the agility of a company improving its ability to react fast.

Last but not least the big picture is determining a company’s path. The management needs foresight and vision to successfully lead in times of change. Too much focus on minor details often blocks clear view on the actual target. Approaching problems analytically from an internal as well as an external perspective leads most likely to the most favourable results.

Summarizing, a resilient company needs an internal and external view on its processes, culture and portfolio. These views promote early identification and exploitation of opportunities and prevent to fall behind the competition. Transparency and simplicity in the structure and the culture of an organization promote quick decision making and increase the general quality of the decisions made as the chance of mistakes in the problem analysis or in the execution of strategies is reduced.

When Bad Leadership Kills Morale and Culture

During the research for a task I found several information about the Smartphone manufacturer HTC who was and still is in a crisis. HTC had numerous problems, originating form different, internal and external sources. One of the reasons for the crisis was a tarnished company culture and employee morale. Confidential information were declassified and leaked, not only by low level employees but even by high ranking managers. Further, employees colluded with suppliers to make false expense claims and had in general little to no loyalty towards the HTC.

So where did these cultural and loyalty problems originate from? The main reason was the leadership approach HTC’s CEO Peter Chou was following. From internal sources one hears a lot of criticism on his abrasive management style. If others did not agree with his strategy he “openly berated manager and overrode their decisions, often with little discussion,” as insiders told Reuters. The fact that Chou is neither willing to change, nor to step down, and that there is no successor to replace him as CEO is additionally pushing down the morale within HTC. In HTC’s case this further led to poor performance.

This is a real world example of the negative consequences and implications of bad leadership and management on employee morale and on company culture. I would like to present some explanations for the loss of morale, culture and performance due to bad leadership.

Firstly, one needs to define what is considered bad leadership. We need to distinguish it from so called “Toxic Leadership” where the manager or leader of a group or company consciously abuses his position for his own advantage. Rather, managers  practicing bad leadership actually try to do the very best for their company, they are just not aware of their mistakes or the fact that their managerial style is the wrong one, at least for their specific company.

Leaders are role models which should set their employees an example of dedication to their work. As soon as employees see that their employer is not acting rational and effective, they lose trust into the leaders skills and his vision and reduce their work effort.

The employee morale is also lowered if the company  is situated in a bad position due to bad leadership. The organization failing not only because of wrong but poorly made decisions, makes it hard for employees to preserve a positive perspective on their work. Resulting from a domino effect, as soon one employees morale dropped, further usually follow. Low morale in an organization is like a cancerous ulcer and can destroy the company form within if it is now fought properly. Therefore, reasonable decision making is an important variable in this situation. A decision discussed properly in a productive and fair environment is easier to accept and to understand for an employee than a resolution just made by the manager himself. Even if the outcome is not as anticipated, due to reasoning the employees can see the managers idea behind his decision and are not just affected by the result.

HTC’s case shows incompetent leadership has far-reaching implications on the company, because immoral behavior is shaking the organizations very foundations and may crack the cultural unity into pieces. This effect is intensified by employees searching for new jobs as soon as they lose their trust in their leaders. Especially those members of an organization, who take pride out of their effort at work – mostly eager, well-performing employees – , are likely to be driven out of the company by bad leadership.

Summarizing, incompetent leadership has numerous negative effects on the company’s performance. Besides the direct influences on the effectiveness, bad leaders negatively affect employees mood, behavior and thereby performance, which not only reduces the overall company effectiveness further, but also drives organizations out of the market in the long run, due to brain drain.


Sources:

http://www.ehow.com/info_8649813_effects-bacd-leadership.html

http://www.bensimonton.com/good-or-bad-leadership.html#.Uy6gfvl_vj8

http://www.forbes.com/sites/mikemyatt/2012/10/18/15-ways-to-identify-bad-leaders/

http://www.forbes.com/sites/jackzenger/2013/12/05/the-results-are-in-bad-leadership-is-contagious/

Which Incentive Suits Whom? – A Survey Over the Rewards for the Main Corporate Personalities

In our second lecture we talked about how different personalities have different influence on the organization and its performance. Variations in personality lead to a more heterogeneous company and, as scientists tell us, usually a diversity of personalities should lead to a more creative and innovative environment.

But of course heterogeneity does not only create advantages. Organizations are confronted by challenges in different areas resulting from diversity. For example the chances that conflicts arise within the organization increases when multiple personalities are involved in processes. As Marc already stated in his blog post, the gender makes a difference in the way people are motivated, but also each personality type demands for different types of motivational incentives.

As I found out in my research and as it is common in many areas of science, there is a variety of opinions on how many different personalities there exist at workplaces. Further, it is important to know that one can come up with a different classification of personalities depending on which area of the work environment one focuses on. In the following I will summarize some of the workplace personalities I found and give short pieces of advice about how to motivate them.

Corporate Personalities, their percentage in the company and their career progression

Corporate Personalities, their percentage in the company and their career progression

The Forbes Magazine published an article listing 9 types of corporate personalities:

  1. The Alpha
  2. The Bambi
  3. The Believer
  4. The Heretic
  5. The Natural
  6. The Pragmatic
  7. The Soldier
  8. The Survivor
  9. The Toiler

For detailed explanations please refer to: http://www.forbes.com/sites/stevefaktor/2012/11/15/feature-the-9-corporate-personality-types-how-to-inspire-them-to-innovate/

As it is unfortunately not possible to see the authors motivational incentives (the registration on his website failed when I tired it), I thought about how to motivate each group myself. In the following, I will focus on the groups where the evaluation of the correct incentive might be not obvious and where a more detailed explanation might be necessary.

Alphas, on the one hand, are a major asset for every company but can evolve to a dangerous threat in case they are not aligned with the organizations aims. Thus it is very important to keep them lined up with the organizational goals by motivating them. Alphas are usually quite high up in the hierarchy and one might think financial or materialistic incentives would not work for them but that is a misjudgement of their personality. As stated in the article, they obtain high portions of their self-esteem from people’s perception of them. Therefore, visible, materialist rewards are perfect for them. Another possible reward can be the leadership over a project to address their sense for ambition.

The Bambis, on the other hand, are quite easy to satisfy in motivational matters. They are new, inexperienced and hence nearly any kind of incentive works for them. Materialistic incentives work for their motivation as good as additional responsibility. More responsibility is in fact a cheap way to motivate them, as the eager, opportunity hungry Bambi is striving for ascent in the hierarchy.

Steve Faktor states it in his Forbes article best: “[the Heretics] commitment and vision will get the best from subordinates – as long as they maintain momentum and stay motivated.” Therefore, incentives here are extremely important – and extremely difficult. How does one motivate a person, who is as difficult to assess as the Heretic? You do not even know if any incentive will pay off or if it is even necessary. Thus, trial and error is the most suitable option. Try different rewards and observe how they react. If they are content as reaction to the reward, the reward seems to suit them. Otherwise, different motivational measures should be implemented for them. Generally, as Heretics are doing their own thing, showing them your trust and giving them responsibility might be a good start to give a trial, but as every heretic has his own specific character traits, there is no simple, universal solution for this group.

The Toilers are quite simple to motivate. As one can see from the explanations above, everyone can be rewarded similarly even though the efficiency of each reward might differ. For the Toiler this applies as well but, as he is working for his life after work, he is most likely fine with financial bonuses and not too interested in responsibility or advancement.

The Survivor can be tricky to motivate, but their name states it all: they will survive. Thinking about them, they are similar to Toilers. Both of them just survive the everyday company life – on different hierarchical levels – but their essential characteristics are similar: they work for their life outside work, thus the same incentives are applicable for the Survivor as for the Toiler.

Thus, each group is demanding for different types of incentives and rewards as stated above. There can be further differentiation not only by the form, whether material or immaterial, but also by e.g. the type of reward within the group of material incentives, so if it should be money or rather tangible items, and also by the amount, which usually increases with the position in the hierarchy and the time working in the company.


Sources:

  • http://everydaylife.globalpost.com/personality-affects-behavior-workplace-7367.html
  • http://www.forbes.com/sites/stevefaktor/2012/11/15/feature-the-9-corporate-personality-types-how-to-inspire-them-to-innovate/
  • http://www.16personalities.com/intjs-at-work
  • http://www.reliableplant.com/Read/18127/can’t-we-all-just-get-along-understing-6-workplace-personalities
  • http://dashburst.com/workology-workplace-personality-types/