All Posts Tagged With: "culture"
Baldrige Promotes Resilience
No matter what your organization does, it must be resilient to overcome adversity, whether that adversity comes from a recessionary economy, global competition, runaway healthcare costs, or shrinking budgets in education and government. Baldrige Award winners exemplify resiliency through visionary leadership, employee engagement, open communication, and a focus on the future.
George S. Everly, Jr., PhD is associate professor of psychiatry at The Johns Hopkins School of Medicine, executive director of Resiliency Science Institutes, and author of Resilient Leadership: When Failure Is Not an Option. In “Building a Resilient Organizational Culture,” he writes that “just as individuals can learn to develop personal traits of resilience, so too can organizations develop a culture of resilience.” This occurs when key leaders demonstrate four core attributes of optimism, decisiveness, integrity, and open communication. When a few leaders model these behaviors, Everly notes, “we believe they have the ability to change an entire culture of an organization as others replicate the resilient characteristics they have observed.”
The framework for changing the culture addresses four areas:
- People prosper from success. Create an environment that makes it possible for people to succeed, especially early in their careers, and then increase the difficulty and complexity of tasks.
- People learn while observing others. Assign new employees to successful work groups so they can experience “vicarious success.”
- People need encouragement, support, and mentoring. “Research suggests that the single most powerful predictor of human resilience is interpersonal support.”
- People need basic training in how to…
Observations from the Front Line
I spent the last month in a cubicle, wearing a tie, working 8 to 4, writing for a large, industry-leading company. This is life for most people but it was new for me, marking the longest stretch going to the same office building in the last 30+ years. I learned a few things about corporate life—and confirmed a few others:
- Wearing a tie sucks. In an age of business casual, wearing a tie feels like going back to the days of “Mad Men” without the glamour. It doesn’t help to have a “casual Friday,” in part because the employees in this division must “earn” it or the head of the division will take it away. Few things damage morale more than treating people like children.
- The company’s mission and vision inspire innovation and excellence in the services it provides. I saw it in the stellar work of the group I was supporting and in the creative solutions the company has developed.
- But…at the corporate level, the mission and vision are secondary to financial considerations. Faced with choosing sides in a national debate about healthcare, the company chose to protect its bottom line rather than fix a broken system. As a result, it will continue to prosper in a system that remains broken, to the detriment of people who could have had better options.
- The CEO makes more in two hours than probably 90% of his employees make in a…
Baldrige Model: How do you engage your workforce to achieve organizational and personal success?
Item 5.2 in the Baldrige Criteria asks key questions about how you engage, compensate, and reward employees to achieve high performance. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
- Determining the key factors that affect employee engagement
- Creating a culture and a performance management system that promotes open communication, high-performance work, and an engaged workforce
- Assessing employee engagement and correlating the findings of these assessments with business results to identify opportunities for improvement
- Developing a learning and development system that serves the needs of the organization and the development needs of all employees
- Managing effective career progression and succession planning
Best practices to consider:
- The organization uses employee data from a number of sources including employee surveys, turnover rates, and exit interviews to determine and prioritize employee requirements and then validates those requirements with employees.
- An effective performance management system supports both individual and organizational performance, aligns individual goals/objectives with the organization’s mission and vision, and addresses individual development.
- Employee satisfaction/engagement surveys are done more frequently than the typical annual survey, often with a statistically-valid sample of employees.
- Every employee has a development plan that supports both personal and organizational improvement.
Common problems areas:
- Organizations tend to assume they know what employees require or they rely on generic employee satisfaction surveys to provide a list, but they fail to validate their assumptions.
- No performance management system has been developed.
- Employee surveys are conducted annually…
Customer Culture as Differentiator
Yesterday, I wrote about companies that have created the position of Chief Customer Officer to bring the Voice of the Customer to the senior leadership team. Today, I want to write about a company that probably doesn’t need a CCO because it differentiates itself through its customer-focused culture.
The Red Wing Shoe Company serves blue-collar trades such as construction workers, telephone lineman, and miners. Located in Red Wing, Minnesota, a city of 6,500 southeast of St. Paul, the company employs 2,200 people, half of them in Red Wing. Earnings for 2010 were $448 million, up 12% from 2009, which was a tough year for the economy and for the company. According to an article on Bloomberg (available here) Red Wing “went to a four-day work week, froze raises, scaled back its second shift, and offered voluntary retirement packages” to survive the recession, but hired more than 300 employees in 2010 as sales rebounded.
Red Wing carves a unique path through the shoe industry:
- It distributes its footwear through nearly 500 company-owned and independent dealerships, which are “old-fashioned shoe stores with sales people who sit with customers, measure their feet, and fit shoes one pair at a time.”
- The 285 independently-owned stores are dealerships from which Red Wing collects no franchise fees, marketing fund contributions, or royalties on sales. “Our goal is to provide great service through great dealers,” said Dave Murphy, president and chief operating officer. “We don’t want…
For Hospitals, Culture Matters Most
According to a recent study, the number one factor that distinguishes top-performing hospitals from bottom-performing hospitals when it comes to mortality rates for heart attacks is organizational culture.
Not the size of the hospital. Not “superstar” physicians. Not electronic medical records systems.
Culture.
The study, published in The Annals of Internal Medicine (abstract here), involved 11 hospitals that ranked either in the top 5% or bottom 5% in mortality rates for acute myocardial infarction (AMI). The researchers conducted more than 150 in-depth interviews with leaders and staff at these hospitals, then correlated hospital performance data with themes from the interviews. The researchers concluded that “hospitals in the high-performing and low-performing groups differed substantially in the domains of organizational values and goals, senior management involvement, broad staff presence and expertise in AMI care, communication and coordination among groups, and problem solving and learning. Participants described diverse protocols or processes for AMI care (such as rapid response teams, clinical guidelines, use of hospitalists, and medication reconciliation); however, these did not systematically differentiate high-performing from low-performing hospitals.”
In other words, the difference between high- and low-performing hospitals is the quality of leadership, not the quality of physicians, technology, or equipment.
One of most effective ways to develop a cohesive vision and build a successful culture is by integrating the Baldrige model. Take a moment to read the profiles of hospitals that have won the Baldrige Award and you will be struck by the strength…
21Mar2011 | Steve George | 0 comments | ContinuedA Culture That Values Employees
What is your organization’s turnover rate? Why does it matter?
Software company SAS has an employee turnover rate of 2.6%. The info-tech industry average is 22%. SAS has approximately 11,000 employees. If it lost employees at the industry rate, it would have to replace an additional 2,100 employees each year.
How much does it cost to replace an employee? You can find a method of calculating that cost here, but a good rule of thumb is 150% of an employee’s annual compensation (the cost of recruitment, training, lost productivity, and lost sales, etc.). I don’t know what the average annual compensation is for an SAS employee who leaves the company, but let’s say it’s $60,000. Probably low for knowledge workers and certainly low for executives and managers, but we’ll be conservative here. If it costs SAS $90,000 to replace every employee, the company’s 2.6% turnover rate compared to the industry average 22% rate is saving SAS $189 million annually!
How does SAS achieve such a low turnover rate? According to CEO Jim Goodnight, “Knowledge-based companies need knowledge workers. Looking at services that keep employees motivated, loyal, and doing their best work as merely expenses and not an investment is, I think, a little shortsighted.” So SAS keeps turnover low by investing in its employees.
In 2010, SAS topped Fortune’s Best Places to Work list for the second year in a row. According to Fortune, its perks for employees are…
22Feb2011 | Steve George | 0 comments | ContinuedHow to Hire for Values
One of the first questions asked by the Baldrige Criteria is for the distinctive characteristics of your organizational culture. The entire Leadership category revolves around culture including how you set and deploy your vision and values, create your culture, promote legal and ethical behavior, and fulfill your societal responsibilities.
Culture is critical because it reflects “the principles that define who you are as an organization and that shape day-to-day business decisions,” according to Alan Lewis, owner and chairman of Grand Circle Travel, a $600 million tour business for Americans ages 50 and over. Lewis recognizes that an organization’s culture is carried by its people. “Employees who do not adhere to a shared corporate culture dilute it,” he writes, “detracting from the essence that gives your company its identity and helps it achieve aggressive goal.”
His views explain his January 26 article in HBR: “Why My Company Hires for Culture First, Skills Second.” Grand Circle Travel uses a values-based hiring model to interview potential job candidates for values. Lewis states, “This decision has not only enhanced our recruiting efforts, it has contributed to the long-term success of our associates and of our organization.”
He offers three pieces of advice for developing a values-based hiring process:
- Involve job candidates in activities that reveal their values. Grand Circle uses a group interview with quirky challenges that require them to interact, work with each other, solve problems, and exhibit leadership. He describes a “raw-egg drop…
