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Update: February 1, 2023

Want to Improve Performance? Zero in on the “How” and “Why” Your Organization Creates Value. Here Are 4 Ways to Know You’re Ready.

Want to Improve Performance? Zero In On, and Improve, the “How” and “Why” Your Organization Creates Value

If you’re looking for incremental improvements in capacity or yield, or paradigm shifts in overall productivity and performance, dig into the the “how” and “why” your business creates value.

What is value in business? Creating and sustaining value is the purpose of business. Value for the consumer. Value for the company. Value for the individual stakeholders, workers, and partners that make up the business. Value for the community and the world. In exchange, the business receives goods, services, or money. A recent Forbes article puts it succinctly, “the purpose of a company is to have a meaningful vision and then to be profitable in achieving it.”

When a business starts out, its value proposition and methods for delivering it to its customers are often clear and well-articulated throughout the organization. Everyone in leadership and the workforce are on board and rowing in the same direction.

Over time, however, through rapid growth, responses to market dynamics, economic conditions, and other circumstances, the value proposition and delivery methods can become less clear, more complex, or break down. 

In any case, the business stops delivering on its original purpose and may need help getting back on track and improving performance. That is typically when a management consulting firm like ours is brought in to help identify issues, build and implement a plan to improve performance, and, once again, deliver that value up and down the chain. Let’s look at the two major areas we typically address when working with companies to improve performance: the “how” and “why” of their business. 

Our team typically addresses one of the first areas with every business we partner with: its Management Operating System. In its simplest definition, a Management Operating System, or MOS, is the combined tools, processes, and disciplines required to achieve your organization’s business objectives. It answers “how” a business creates value, the “nuts and bolts” of moving inputs to outputs to satisfy the needs of the company and its customers. 

Too often, however, we find the MOS is poorly formed or missing entirely. This finding is often especially true in more entrenched organizations, where old habits die hard, as they say.

To Address Performance Shortfalls and Improve the “How”, Answer These Questions:

1. Is Each Step of Your Input to Output Process Defined and Documented for Everyone to Follow?

Simply defining, in broad strokes, the steps or milestones it takes for your company’s raw inputs to make it to the end user consumer and add value along the way can be eye-opening. For organizations that have been around a while and have deep “tribal knowledge” buried in various departments, extracting and documenting this information can take time.

These circumstances, and more, are often where a seasoned outsider’s perspective and capabilities can prove extremely valuable. But, getting your system of delivering value down, even on paper or a whiteboard, is essential. Without identifying each stage or link in your value chain, and its subsequent steps, it can be easy to misidentify issues or miss them entirely. Perhaps most importantly, this process forms the foundation for developing a robust Management Operating System (MOS).

2. Are Any Systemic “Gaps” Identified and Bridged?

There is often a great divide between operational departments, production steps, management tiers, and more in every organization. Each department may have its own acronyms, colloquialisms, and language to describe and manage its domain.

In addition, the workers and managers may have their own work styles and can create barriers (or silos as they’re often called) for the smooth flow of processes, information, and value.

To complicate matters further, several different software systems in place may not play nicely with each other. For example, the sales system may not “talk” to production planning. Planning may not work well with procurement or inventory management. In other words, one hand may not know what the other is doing. Process handoffs from one department to the next may lack efficiency and significantly waste time and resources.

Uncovering these gaps in your Management Operating System (MOS) and bridging them is vital to improving performance. These “in-between” areas are often where substantial amounts of productivity are lost. Therefore, it is essential to bring them out into the light of day and identify how they impact productivity.

3. Is Your Organization Actually Open to Change?

Change management is a disciple unto itself nowadays. Answering whether your organization is open to change can be challenging and often confronting for many companies. And there may be a different answer depending on whom you ask, their department, and their position within the organization.

Often what motivates change is that the pain of not changing becomes more significant than the perceived pain of making the necessary changes. It’s human nature. And we carry that into business.

The pain of not meeting customer orders, high employee turnover, and financial losses spur us into action, much like a doctor’s advice to make changes in our lifestyle or risk serious health issues. But the trick is to make those changes or improvements before they create problems.

So, ask yourself and everyone in your organization, are you open to change and taking the necessary steps to improve? Be ready to listen.

4. Are You Equipped to Accurately Identify Performance Issues and Manage Improvement Internally?

Answering this question may seem like a blatant pitch for an outside consulting firm like ours, and maybe it is. However, a fresh yet deeply experienced set of eyes (or even better, multiple sets of eyes) can uncover problems that you, or those you have put in charge, cannot see while performing typical daily tasks. If you’re already in a situation where you’re underperforming, then it becomes even more demanding.

Your managers and frontline leaders are most likely caught up in daily firefighting to try and stay above the fray. Pushing further responsibility on key personnel who may already be taxed simply keeping up can lead to quick burnout. You do not want your best performers pushed out the door.

The other issue with managing change and performance improvement with internal resources is going up against a “we’ve always done it this way” mentality that can creep into any organization over time. Outsiders can often bring new information to the table that doesn’t exist in your organization’s brain trust and offer counterpoints to established norms that will deliver improvement and transform operational performance.

As the old saying goes, you can’t do the same thing repeatedly and expect different results.

Delivering the “Why” of Business Comes Down to Your Leadership Engagement and Development

The next most significant area we focus on when partnering with our clients is improving the “why” of their business. The “why” of any business can be classically defined as creating shareholder (or stakeholder) value.

Milton Friedman (from his 1962 collection of essays Capitalism and Freedom) describes the “why” of business like this, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Over the last few decades, the social responsibility of business is becoming more evident and transparent. Companies are now focused on creating and sustaining value on a more globally responsible level. The days of profit “at any cost” are heading into the rear-view mirror.

With that change have come grander definitions, visions, and purposes for business. As discussed, adherence to ESG (Environment, Social, Governance) is becoming more commonplace. As a result, the scope of delivering business value has expanded to encompass ever-higher social ideals.

But if your organizational culture fails to take care of (and create value for) its people at every level, any grander vision can ring hollow to the hard-working people out on your front line. So, how do you begin to address your company culture substantively? How do you make sure that it delivers the promise and purpose of your vision and mission while at the same time achieving sustainable performance and value?

As more extraordinary corporate missions have come to the fore, so have their inherent cultures (or lack thereof), which is why building a culture of performance is part of our methodology. We focus on leadership engagement and development as an essential part of this holistic approach to improving operational performance.

Your leaders should embody your stated values and your culture. Our LEAD (Leadership Engagement and Development) program is a proven way to take those often-idealized statements of your brand promise, identify the behaviors that represent them, and train and engrain them across your organization—beginning at the top. 

Our LEAD program is a way for everyone at every level to not just “talk the talk” of your company culture but to “walk the walk.” It increases the authenticity of your workplace culture by building it from your own core values. We then extract the everyday behaviors that best demonstrate those leadership qualities and train, coach, and mentor them till they’re habitual—for long-term sustainability and radically improved performance.

And because everyone is included, from the top floor to the shop floor, the entire organization becomes more committed to the “why” of the business, increasing its authenticity and vitality. And when you have a fully developed sense of why you’re in business, performance improvements will follow naturally.

Conclusion for Business Leaders

Whether you’re looking for incremental improvements in capacity or yield, or paradigm shifts in overall productivity and performance that can turn around a business and contribute millions to the bottom line, address two of the most fundamental questions. Dig into the details of the “how” and “why” you’re doing business in the first place.

At POWERS, we implement our proven Leadership Engagement and Development system to connect the dots between leadership behavior, an optimized company culture, and operational performance improvements.

Our team has helped executive leadership across many industries operationalize their culture for rapid and sustained performance improvement, increased competitive advantage, greater value, and a stronger bottom line.

To put our experienced team and proven track record to work for you, schedule an initial discovery and analysis by calling +1 678-971-4711, or emailing us at info@thepowerscompany.com.

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About the Author

Sean Hart

CEO, Managing Partner

Sean Hart is an industrial engineer with a background in manufacturing supervision and project management. Sean’s background is in improving overall plant efficiencies and implementing Lean techniques to improve processes.