Demystifying Organizational Strategy

“Everything should be made as simple as possible, but not simpler.”

— Albert Einstein

Carol Beatty, Queen's IRC FacilitatorPeople management professionals are often exhorted to become more knowledgeable about business strategy but many are discouraged by the jargon and the apparent complexity of the field. While it is true that a radical rethink of your organization’s strategy involves creativity and specialized skills, most regular strategic planning exercises do not require that level of sophistication. In this article, I will follow Einstein’s advice and aim to demystify the organizational strategy process by removing the jargon and boiling it down to five simple questions. Answer these questions and you will be able to meet the challenges of most strategic planning situations.

Your strategic planning group should set aside uninterrupted time to discuss and come to consensus on these simple questions:

  1. What business are we in and how are we doing now?
  2. What’s happening around us? Are there any serious dangers in staying where we are – i.e. sticking with the same business and strategy?
  3. If so, is there a better place for us to be?
  4. How do we get there?
  5. How will we know we have arrived?

Question 1: What business are we in and how are we doing now?

What business are we in? This question appears basic but your group may be surprised at how little agreement exists initially about your business definition. It is as though we live in the “same, different” organization. Moreover, if there are new participants at the table or if you have not had this discussion in some time, agreement on what business you are in is essential before proceeding further.

Start with your mission statement unless it is too lofty or theoretical. Or start by discussing the following sub-questions.

  1. What do we do?
  2. For whom?
  3. Where?
  4. How?
  5. What are the key success factors of this business? (What do we have to do extremely well to satisfy clients and succeed over the long term?

For example, at a recent strategic retreat of the Board of Directors of a Canadian not-for-profit organization, participants decided their business definition was:

We examine/evaluate the evidence on medical equipment and drugs to provide credible advice to decision-makers at various levels of Canadian health care. Guided by the priorities of these decision-makers, our reports, recommendations and tools are used to choose the right drugs and technologies and are consulted by health funders, providers, institutions and patients.

In order to deliver on this business definition, the retreat participants decided the following key success factors were critical: Trusted/Credible; Relevant/Useable; Independent; Timely; and Affordable.

How are we doing? There are many approaches to assessing organizational health. The simplest and fastest way is to take the key success factors that you have agreed upon and review how well the organization is delivering on each of them. If you are in a high-tech business, for example, one of the key success factors might be getting new products to market before the competition. If that’s the case, you need to measure how fast your organization invents, produces, and markets its new products compared to others in the industry. Each business will have different key success factors and so this assessment is based on having a thorough understanding of your own.

Another approach to organizational assessment is the Balanced Scorecard, which uses a number of categories to rate organizational health (these vary depending on the industry and sector). Or you could use industry or sector specific benchmarks that the leadership group considers relevant comparators. For example, in one municipality, benchmarks were established using the National Quality Institute’s Public Sector Criteria for excellence.

Finally a more thorough approach is to conduct an organizational audit. An audit involves a comprehensive review of all important operational and strategic areas of the organization. It can be conducted through questionnaires or interviews with stakeholders or undertaken by the leadership group. The categories for review can include: organizational structure, culture, leadership, managerial climate, human resources, communications, technology, financial, capital and other resources, market share and customers, intellectual capital, relationships, and key result areas.

The approach you use will depend on the time available and the comprehensiveness desired. If necessary a consultant can be hired to provide an objective and non-threatening way to obtain input from stakeholders, especially staff members.

Question 2: What’s happening around us? Are there any serious dangers in sticking with the same business and strategy?

A scan of the relevant environment, both internal and external, helps to identify whether there are serious dangers to the organization in staying where we are – i.e. sticking with the same business and the same strategy. What are the driving forces affecting the organization now and in the near future? If your group does not take them into account, flaws in thinking and logic can too easily sabotage the quality and implementation of the strategic plan. If this scan is considered too technical or time-consuming for internal members to undertake, a consultant can be hired to assist.

Figure One is a helpful pictorial representation of the most common strategic change drivers that you may want to consider in this part of your strategic planning process. Some may not be relevant to your organization; likewise some may be missing, depending on your industry and sector. Before committing a lot of time scanning widely, establish which areas you will pay most attention to. But beware, you may be blindsided by developments seemingly coming from nowhere you if your scan is too narrow.

Figure One – Scan of Strategic Change Drivers

After your group has decided on the most relevant areas to scan, answer the following questions:

  1. What are the major events, developments, and trends happening in this part of our environment that will have an impact on our organization? Which are most critical for us to deal with in the near future?
  2. What are the characteristics of our industry (commodity or high value? growing or declining? diversifying or consolidating?). Are these characteristics shifting? If so, what are the implications?

The answers to questions about the industry/sector and general environment will likely involve research. The choice of how to gather information for this assessment is a key one. If you measure the wrong things, you will miss opportunities and may be blindsided by problems that seem to come out of nowhere. Good sources of information can come from:

  • Commissioning formal reports
  • Researching via press, web, or other published data
  • Chartering a team/task force to do the research and produce a report
  • Engaging industry associations
  • Meeting with the employees who liaise directly with a specific group of interest
  • Inviting an expert or representative of the relevant industry group to speak at summits or meetings
  • Holding a regular environmental scan meeting
  • Putting yourself in the shoes of a specific group (such as customers or competitors) and imagining their responses to the questions
  • Doing a mind map with a cross-section of members of your organization to tap into their collective knowledge

After you have completed your scan, a SWOT (strengths, weaknesses, opportunities and threats) matrix can be used as a tool to summarize your deliberations (see Figure Two below).

Finally your group should consider the second and most important part of our simple question. Namely, are there serious dangers in staying where we are and sticking with the same strategy? Is the business you are currently in a viable one in light of what’s happening in the environment? Is there a good fit between the present strategy and the environment? A changing environment might mean that your present business model and strategy are becoming problematic.

Figure Two: SWOT Matrix

Strengths Weaknesses
Opportunities Threats

Question 3: Is there a better place for us to be?

If you have concluded that you are in some danger or that there is a wonderful opportunity, either now or in the near future, and that a change in strategy is desirable, the next step is to agree upon changes in strategic direction. Do you need to make a radical change in the way you complete? Or do you need to modify our value proposition – a smaller change in direction? Do you want to change your mix of services/products/markets served in order to grow or at least stop decline? Or does your current strategy merely need tweaking?

This part of the strategic planning process is probably the most difficult and the one that requires the most creativity. Given all you know about our internal capabilities and challenges from the organizational assessment and all you know about the external environment right now, how can you create a sustainable advantage for your organization?

There are several approaches and tools that can help your group think through this part of the strategic plan, depending on how radical the change in strategic direction must be. The most radical is a change in generic strategy, or the way in which you compete for the loyalty of your customer/clients. Can you create more value by changing some aspects of our generic strategy? The generic strategies are :

  1. Winning through cost:
  2. Winning through great products or services:
  3. Winning through customer intimacy:
  4. Winning through choosing a profitable niche.

On the other hand, if you have a viable business model but find that your growth has stagnated, consider growing the business by choosing one of four following strategic changes:

  1. Same products/services, same markets. This strategy involves increasing our market share by taking business away from our competitors.
  2. Different products/services, same markets. This strategy involves creating new products or services adjacent to those we currently offer and marketing them to our current customers.
  3. Same products/services, different markets. This strategy involves entering new markets (for example, crossing international borders) with the same product/service mix.
  4. Different products/services, different markets. This strategy involves entering new markets with new products/services both at the same time.
  5. It should be noted that these strategies are listed in order of risk from least to most. Few organizations have been able to successfully implement the fourth strategic direction.

A third possibility, and one of the simplest strategic changes to make, is a decision to retrench to the core of the organization. This strategy is most appropriate if you have taken on too many products/services or have responded in an ad hoc manner to opportunities that have arisen. It is usually a problem for smaller or younger organizations that have struggled to survive and grow, although this situation can occur in huge conglomerates that have tried to manage a number of unrelated businesses. This strategic refocus involves deciding on which activities are both profitable and essential to the identity of the organization and ceasing to engage in those that do not meet these two tests.

After your group has come to consensus, summarize the strategic direction chosen as follows:

Our Strategic Direction:

In the next 3 years, we will focus on____________________________________________________________

in order to ______________________________________________________________

Our Strategic Goals:

The following are the stretch goals to reach this Strategic Direction. (No more than five)

Our Strategic Vision:

What will our organization look like when we achieve our Strategic Goals?

Question 4: How do we get there?

Having a vision and goals at a high level is good, but you will not arrive at the destination without more detailed planning. You must translate the broad strategic goals into specific objectives and action plans to be carried out in the near term. Without these, the entire strategic planning effort can turn into a mere theoretical exercise. The goals should be detailed into clear objectives that can be measured, assessed, and revised if necessary. The objectives are then assembled into action plans that include specific activities that must be undertaken, measurements that will be made, deadlines, persons responsible for carrying out the activities, and follow up that will be undertaken. Each of the strategic goals can be summarized by using the template offered in Figure Three (note that a separate template will be necessary for each goal).

After the goals have been detailed into objectives, each of the objectives should be detailed into action plans that specify key actions required to reach the objective, each with its own deadline, responsibility, resources required, and measures of achievement. Once this is accomplished, a formal written ‘strategic plan’ should summarize the decisions of the entire strategic planning process.

Figure Three: Turning Goals into Objectives

Strategic Goal 1:

Objectives Time Horizons for Completion Lead person or group responsible for completion
1. 2. Etc. Year 1:

 

Year 2:

 

Year 3:

 

 

Question 5: How will we know we have arrived?

A specific follow-up system should be developed to ensure that the plans will actually be fulfilled instead of being put on a shelf to gather dust. Devices such as a monthly executive review, reports due, and yearly strategic planning updates should be decided by your group before you finish your plan. Measures of progress and success should be planned and rigorously taken. Monitor progress regularly, with strategies revised and annual objectives developed yearly thereafter, based on the progress made and obstacles encountered.

Final Thoughts

These five simple questions can guide your organization through strategic planning in most situations. Remember, implementers often complain that senior managers have a short attention span and do not continue their interest and support throughout the implementation phase. The statistics on successful implementation of new strategies are not encouraging, so don’t assume your tasks are completed after the plan has been written and communicated. The unwavering support of your strategic planning group and senior executives will be necessary to see it through to a successful outcome.

References

Treacy & Wiersema, The Discipline of Market Leaders, 2000

Michael Porter, The Five Forces that shape Strategy, Harvard Business Review, January 2008

Downsizing Your Organization? Lessons from the Trenches

In this current difficult economic climate, many organizations are facing the unfortunate necessity to downsize and streamline. Astute executives and HR managers, many of whom have been through previous rounds of downsizing, realize that they must approach it carefully because both research and experience have shown that there are many negative consequences to this process. The big question for these managers is: “Can we avoid the pitfalls of downsizing and create the best possible outcome for our organization?” The answer is a qualified ‘yes.’ The emotional trauma of downsizing cannot be eliminated totally but the long-term damage to your organization can be minimized. This article will summarize the best practices of organizations and managers who have faced this daunting challenge and the lessons they have learned.

What’s to Love About Employee Ownership?

Unions often feel uneasy about employee ownership, Dr. Beatty says. But in these cases drawn from her research, they learned to love it, embracing it as a potent strategy for saving jobs, keeping plants open, and building better union-management relationships.

Surprising fact: in 2002, unionized workers made up a larger percentage of U.S. employees holding stock options than non-union workers (General Social Survey for 2002 – Rutgers University).

Surprising fact: U.K. workplaces with employee share ownership have much higher union membership than those without it.

Numerous carefully controlled studies have shown that companies with significant employee ownership grow faster, by about three percent annually. Furthermore, faster growth of eight percent to 11 percent was experienced by companies implementing employee ownership (EO) “well” (Beyster Institute website). For example, UPS, called “the tightest ship in the shipping business,” is majority owned by its 300,000 unionized employees.

So why aren’t unions jumping on EO? It seems that unions become enthusiastic about it only when it provides a way of saving jobs during looming crises. Some union leaders have become suspicious because the term “ESOP” has become associated with union busting during high-profile failures such as United Airlines. Others have a philosophical reluctance to participate in corporate decision-making because of their duty of fair representation. Also, some unionists view minority representation on corporate boards as a waste of time.

But my case studies of five unionized Canadian plants that adopted EO during a threatened closure might convince them otherwise. Two of the five, Great Western Brewery and Algoma Steel, survived as independent entities; and two others, Spruce Falls and Provincial Papers, were turned around and sold to larger companies. EO proved a potent strategy in the union’s struggle to save jobs and keep the plants open.

If we are interested in relationship improvements as well, the contrast between Provincial Papers and Algoma is very instructive. At both, the union-management relationship had long been difficult. But Algoma’s union got behind employee ownership took control of much of the buyout process and co-operated with the company to preserve jobs and union membership.

A key element of the union plan was the framework for governance. It helped the parties anticipate and resolve many future difficulties before they became severe. It also provided a statement of values that the new company had to live by – values which the union strongly endorsed.

After the buyout, union and management officers addressed gatherings of staff together, symbolizing the new way of running the company. Joint committees at all levels were put in place, and much effort went into gaining employee input into decisions. None of this co-operation prevented the difficult decisions to cut wages and jobs at Algoma, and both of the parties had to share in the pain. However, this pain did not poison the new relationship.

At Provincial Papers, by contrast, the unions did not take charge of the process. Management seemed reluctant to share power with the new employee owners, and so union officers felt they had to battle for information and influence. Whereas employee reps on the Algoma board of directors were able to make an important contribution, at Provincial Papers they were not effective. Despite having studied the successful Spruce Falls buyout, Provincial Papers seemed unable to understand or implement any of the joint structures, participative initiatives or a philosophy congruent with employee ownership. They held onto their old adversarial attitudes and beliefs. So it was a blessing when a large firm purchased the company and reinstated a traditional management hierarchy.

When a unionized company is in crisis, employee ownership can help it survive. But beyond survival, the following factors can raise the probability of sustained success and a better relationship:

  • New senior leaders should have expertise in the industry and experience with employee ownership;
  • Employees should make an actual investment in the stock, even if it is not large – and even if wage and benefit concessions are also necessary;
  • Management must work with the union and help the union leaders look good;
  • Implement the turnaround strategy quickly;
  • Work to create and maintain good employee relations;
  • Make a commitment to employee ownership as a philosophy;
  • Encourage employee involvement and participation.

As Canadian unions and companies become more experienced with employee ownership, they will learn how it can create many win-wins for both union and management – beyond saving jobs during a crisis.

Automakers, Unions, and “Lobbying and Hammering”

Queen’s Industrial Relations Centre Director Carol Beatty sat down with CAW President Buzz Hargrove during his recent visit to campus and discussed developments in the automobile manufacturing sector and the role of his union in addressing major changes in the industry.

You mentioned in your Don Wood Lecture here at Queen’s that negotiated agreements with the Big Three auto makers are no longer set in stone, that they can be superseded by a crisis of the day. Given this, can you offer more detail about the recent GM and Ford announcements about plant closures? And what were you able to do for the downsized workers?

Let’s take General Motors as an example. Within a month of ratifying the collective agreement, we were suddenly called to a meeting at 7 a.m. CEO Rick Wagoner was scheduled to make an announcement in the United States that day. We knew it would have an impact on Canada when we were called in.

They told us that they were closing Car Plant 2 in Oshawa at the end of August 2008. They were reducing one of three shifts in Car Plant 1 sometime in fall 2006; thirty-nine hundred jobs total. We thought our operations were safe because we were the highest quality, highest productivity, lowest cost plant on the continent. We were shocked.

GM says they’re closing these plants because they have “no product” for them. They say they’re concentrating on producing vehicles that they know would sell. They were losing market share, and the pressure from Wall Street to get lean and mean was enormous. At the time, we were producing Buick LaSabre, Buick Lacrosse, and Monte Carlo. There was not enough demand for these models.

Our national settlement wasn’t touched but the job loss was huge. The message is: Even if you’re the best, you don’t necessarily keep your job. We’re still trying to help the downsized workers. A large number are ready to retire but we could still end up with layoffs. We’re trying buyouts, voluntary retirement, everything we can.

I know you believe that some of these crises are caused by the lack of a level playing field between North America and Japan in terms of auto imports. What do you propose to solve the problem?

The Canadian and American governments should say to Asia, “We’re not going to allow you to sell anything in our market you don’t build here unless you open your own markets to reciprocal exports.” It would also send a strong message to China for the future.

You’ve mentioned the industry will be in worse shape when China starts exporting automobiles. Is Ontario’s auto industry doomed?

All the analysts are saying that you can build a comparative vehicle [in China] for one-third to one-half the cost here. Wages, material costs, energy, tooling and machinery are all lower in Asia, even though every day you hear about mine disasters and other dangerous working conditions. There are no unions, no dissent. The real issue for us is: Do we really want to buy from whoever makes [a vehicle] cheapest at the expense of our own economy?

Without government policy changes, the industry will be a shell of what it is now in Ontario. Our economy was over-reliant on automotive to start with and the Auto Pact favoured Canadian parts as well as assembly. Now, all that has changed.

Way back in the days of Pierre Trudeau, the government was prepared to get tough in these situations. Why not now?

[Former union head] Bob White met with Trudeau and Ed Lumley back in the early 1980s when imports from Japan were growing. The Americans were forcing the Japanese to invest in the U.S. and Japan agreed to voluntary changes in the U.S. but Canada was ignored. Trudeau told Lumley to just “do it”: to tighten up inspection at the entry port of Vancouver. He also told Lumley to take the political heat from that decision and he did, and Trudeau defended him despite layoffs at the docks. There was a backlash in B.C. but they held firm until the Japanese government ensured that the major players made investments in Canada. It took a long time but they did it.

Why not now? Since we signed the Free Trade Agreement, there’s been this mood in the country that free trade is great, that it’s the fault of the auto makers and the unions if there are problems or layoffs in the auto industry. Politicians take great comfort from that. The Southern U.S. states were giving huge incentives to build plants there – 20 percent of start-up costs on average. But we couldn’t convince Jean Chretien to meet with us on this issue. No movement. John Manley was a free trader. Alan Rock was immovable. When Martin took over, we finally got a hearing. He appointed David Emerson as Minister of Industry, and Emerson listened and responded. Dalton McGuinty (premier of Ontario) too. They started offering incentives to the Big Three to invest here. We were finally getting to them on the trade issue. They made some strong statements.

Then the election came. Now we have to start over again. We’re not sure how the Harper government will respond to this issue, but we’re going to lobby and hammer. [Harper] will have to deal with me on this issue whether he likes it or not.

Thanks for your insight. We’ll keep a close eye on these issues and hope you make progress on creating that level playing field.

The CEOs Speak: What Makes an HR Star?

What do top leaders want from HR professionals? The following information, drawn from the author’s ongoing research, provides valuable insight into what CEOs think HR managers are doing well and what competencies need developing. In general, the CEOs agreed that their HR departments did a good job in the transactional aspects of their work but that more skill in leadership and strategic areas was needed. Their responses underline the new role for HR practitioners being written into the organizational script: that of a strategic business partner to senior leadership.

The Ultimate Retention-Reward System

Employee ownership (EO) usually generates two extreme reactions: EO is the greatest thing since sliced bread, or EO is hopelessly idealistic. Queen’s IRC Director Dr. Carol Beatty spent seven years studying 10 companies with employee ownership and published what she learned in the highly entertaining book, “Employee Ownership: The New Source of Competitive Advantage.” In the following excerpt, she speaks about “exit strategies” for employees.

Companies embracing employee ownership need to think of an exit strategy for internal shareholders. Otherwise the employees may find their wealth inaccessible until they retire or quit. The company may also find itself hamstrung by such repurchase liabilities.

How did our companies handle this issue? Some went public and created an external market for the shares. Others sought a share swap with or an outright sale to a larger publicly traded company. How did these companies and their employees fare?

At Creo, the decision was to take the company public. The July 1999 initial public offering of shares put the company’s valuation at $1billion, giving the founders and early employees 160 times the hypothetical value of their first shares.

Others decided on various sale scenarios. Employee owners at Spruce Falls, who initially owned 52 percent of the company’s shares, came to trust Tembec’s leadership over a period of six years. It must have seemed natural to sell their shares to Tembec when it was allowed to increase its stake from 41 percent to full ownership in 1997, with an average employee investment of $10,000 at the end of 1991 turning into about $145,000. Frank Dottori observed that many employees were uncomfortable with share ownership: “They want job security so they don’t have to wake up tomorrow and find themselves unemployed. But they don’t like to be shareholders. Many will say, ‘I can’t sleep at night if I have $10,000 invested in Tembec and see it drop from $10 to $9, with me losing $1,000.”

At Integra, the company took what Klingbeil called “the elevator ride of value.” At Integra’s worst moment it was virtually nothing. Two and a half years later, it was probably worth 10 to 20 times earnings, a significant value per share. However, economic cycles made the share value extremely volatile. Employee capital should theoretically be patient capital, but many employees find it difficult to be patient. So Integra employees chose to be bought out by the Scott Pickford Group rather than continuing as an independent company, swapping their shares for shares in Scott Pickford’s parent and reaping 10 times their original investment. Most kept their shares in the publicly traded company, rather than cashing them in after the lock-up period expired.

At Revolve, the employee owners, who split their holdings across their two business lines, had a long and complicated journey to safety. In November 1997, SKF bought a 40 percent stake in the company. But SKF wasn’t interested in the gas seal business, so Revolve had to sever that operation off. The seal business was owned 100 percent by family, friends, and business associates. The magnetic bearings business—which quickly grew to become the large operation—was 60 percent owned by those same family, friends, and business associates, with SKF holding the other 40 percent. Employee owners had to wait six months more to sell their remaining interest to SKF and to another partner firm.

SFG also found a strategic buyer—after employees there also experienced the elevator ride of value—and became an operating division of Cayenta. Some long-term senior employees found the value of their shares worth as much as $400,000, while relatively new junior employees got a few thousand dollars.

Some of these exits weren’t as much strategy as luck. And some employee owners are still waiting for their opportunity as at Great Western Brewery.

Sidebar: Three Key Lessons

Kim Sturgess [President and CEO, Revolve Technologies] has learned three key lessons about employee ownership from her experience at Revolve.

  1. Make sure at the outset that you get top-flight input on structuring the deal—and similarly with any future deals to bring in outside investors. In particular, think about your exit from the very beginning. “People told me to do that and I said, ‘Yeah, yeah.’ But you have to think about the exit from the start,” she stresses.
  2. Tied to that is the necessity to maintain control. Revolve’s team lost it twice: once to the venture capitalists and then again, on the magnetic bearings side, when it joined too closely with a major partner, SKF, giving it the right to buy up more of the company. That dramatically reduced any future negotiating power for selling the rest of the company. As a key customers and sales channel, Revolve was too dependent on SKF; when the buyout offer came, the employees effectively had no choice.
  3. From the start, an employee-owned company must assess how fast it wants to grow versus how much control the original team wants to retain. Taking on venture capital can speed growth. But it comes at a cost. “The minute you lose ownership and voting control of the company, you have your money invested in something that you don’t control anymore. That situation should be avoided at all costs. If you want to put everything in, you need to control,” Sturgess stresses.
  4. Finally, she warns against ever getting into a situation in which you are trying to manage by consensus in a group. “Never—ever. It sounded great and it fit with my views: I like to be inclusive and empower people. But somebody has to be in charge. Period, end of story,” she says.

That means settling the tension between being employees and owners. “Employees are employees and owners are owners. When employees try to be owners and be involved in all the decision-making—well, certainly in our case it didn’t work. Things got better when everybody agreed they were employees first and owners second,” she says.

Building the High-Performance Team

The managers who gathered around the table to plan a large budget cut didn’t look much like a cohesive team. In fact, they resembled competing animals around a shrinking watering hole. Each had his or her own staff and mandate to protect. And everyone realized how high the stakes were: if the downsizing wasn’t done judiciously, a damaging political backlash would certainly result. How were they to proceed?

As they eyed one other warily, the Deputy Minister introduced a skilled facilitator, one who understood what it would take to help this task force evolve into a high-performance team. The facilitator knew, for example, that it would be difficult to recover from a shaky start. She also knew that one of the greatest challenges for members would be to resolve the tension between their individual and collective interests.

She would have to address these issues by helping the task force commit to a common purpose and goals, to set up ground rules for working together, and to ensure that all members felt able to express their opinions openly. That completed, she would then need to help members agree on a problem-solving approach and on a way of handling the inevitable disagreements and interpersonal stresses that would occur as they worked together closely. A tall order indeed.

The Research: What Makes For a High-Performance Team?

How can the Task Force facilitator create a high-performance team? At the Queen’s Industrial Relations Centre, we have surveyed more than 200 teams and trained more than 250 facilitators from various public and private organizations.

Our research has found three main high-performance factors that make for excellence in collaborative projects, accounting for more than 80 percent of the statistical variance in team performance in our study:

  1. good team management practices
  2. group problem solving skills
  3. group conflict resolution skills.

Fortunately, these success factors are either skills than can be mastered by the majority of teams or structures and processes that can be put in place. Let’s take a closer look at IRC’s research on each of the three attributes that characterize a high-performance team – and how our facilitator must put it into practice to build the Task Force’s team capacity.

High Performance Factor 1: Team Management Practices

The first element in high performance is a cluster of factors we call team management practices, which fit into three broad categories:

  1. Approaching team tasks – This includes such things as having a team mission, setting team goals, generating procedures or norms to regulate team members’ conduct and behaviour, ensuring efficient organization and meetings, and reaching agreement on sound approaches to task performance.
  2. Maintaining good team relations – To foster top-notch team relations, high-performance teams ensure that all members feel included and able to express their opinions openly. Members share leadership and make sure member talents are fully utilized and nobody gets a “free ride.”
  3. Gaining member commitment – High performing teams demand full commitment to the team and its work from members, even though member efforts may not be balanced over the short run

Our facilitator knew exactly how to create and formalize effective Team Management Practices: she led the Task Force in building its Team Charter. This exercise provides members with a process of mutual discovery about their common purpose and how they plan to achieve it by defining:

  • Task responsibilities – their goals, timelines, scope, and authority
  • Social responsibilities – the roles they are expected to play, the relationships they are expected to develop, and the behavioural guidelines they are expected to follow
  • Commitment to the team – what’s in it for the members, the skills and experiences they have to contribute, and what additional skills and experiences they need to acquire to participate fully

High Performance Factor 2: Team Problem-Solving Skills

Solving problems is at the core of a team’s activities, and these team skills make the most difference between high or low team performance. Teams that are good at problem-solving do two things well: they are patient communicators, and they use a systematic process for solving problems. It is the combination of these two skills that leads to group synergy – the ability to create a better solution together than any of the members could have generated alone.

Communications patience Patient communicators work hard to understand others and to be understood. Creating synergy depends on team members’ willingness to accept each other’s ideas, to delay closure until a full discussion takes place, and to build on all members’ perspectives, alternatives, and solutions. Obviously, this is easier said than done, especially when team members care passionately about the group decision or when rewards are dependent on team outcomes. That’s where patient communication comes in. Of all the communications skills we measured, the most important one involved the way team members reacted to communications difficulties.

Patient communicators do not dampen down passionate stances as too dangerous to handle. Rather, they slow it down so they can listen to the varied perspectives being expressed, focusing energy positively so that barriers are not formed – a big challenge for our facilitator, particularly if members have some history with each other. The facilitator made sure that Task Force team m embers with controversial views were not blocked or ignored, and drew out quiet members so everyone got a fair hearing.

Systematic problem-solving

High-performance teams are also consistent in their use of a problem-solving process. It doesn’t seem to matter much which process they use, be it five or nine steps, but it does matter that they are disciplined in applying it. Our facilitator helped the team put into place a problem-solving process to ensure that members do not prematurely jump to conclusions, but expand their creative and strategic thinking before solution generation and action planning.

High Performance Factor 3: Group Conflict Resolution Skills

The final skill set that the facilitator must develop in the Task Force team is conflict resolution competence.

Every team runs into conflict, but what distinguishes high-performing teams from the others is how the team as a whole deals with it. Teams are headed for trouble when they avoid confronting conflict: it merely festers under the surface of team interactions until it often reappears suddenly as a full-blown crisis. And when such a crisis occurs, it is often personalized to such an extent that it is difficult, if not impossible, to get the team back on track.

Conflict may arise from many sources, but in our experience, interpersonal conflicts have been the most difficult to resolve—individual members’ antisocial behaviour, lack of politeness or respect for others, attempts at dominance, withdrawal or indifference, failure to pull their own weight, criticism or personal attacks, and so forth.

In skilled teams, conflict is viewed as a normal and healthy aspect of working together. Members surface diverse views and feel safe to examine ideas without fear of retribution; are careful not to personalize the conflict, evaluating the idea and not the person. In addition to dealing with current issues, the facilitator made sure that the team created procedures to deal with similar eruptions in the future. This way, team members are confident they can raise issues, subject ideas to critical examination, and express themselves openly, without fear they will harm the team or interpersonal relations.

The Solution: After Teams

All in all, the facilitator had a lot of work to do to ensure that the Task Force developed the team skills to deal with the highly charged and difficult task of downsizing. In the end, the Ministry’s confidence that the effort was worthwhile was rewarded: The Task Force came up with a better-than-expected solution that was fully supported throughout the organization. In addition, Task Force members were transformed into committed advocates and became more sophisticated team players, ready to take on the next team challenge thrown their way

And in both today’s public administration and private sector environments, that challenge will certainly not be long in coming.

Employee Ownership: How Do You Spell Success?

In this paper, the authors look at the evidence of increased employee ownership in Canada. Employee ownership of a company may involve a 100 percent buyout to avoid closure, a transfer of ownership to employees (e.g., at the retirement of the owner), or the establishment of a company stock purchase plan.

The paper looks at case studies of seven employee-owned firms in Canada. The studies show that employee ownership has meant survival, a return to profitability, and in many situations continued growth for these companies.

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