Purpose and performance

The Case For A Purpose Based Culture

For HR.com

Kenneth L. Greenberg

July 2014

Your speaker

Kenneth L. Greenberg, President and CEO KLG Consultants, LLC

•  Ken Greenberg, a former Investment Banker and private equity professional, is the founder of KLG Consultants, LLC.  He heads the Corporate Consulting practice at KLG and besides his other academic a professional accomplishments, has a Lean Management Certification through ExpertRating.  Ken serves as a facilitator for the CEO Exchange program at the Denver Metro Chamber of Commerce, and was a board member of ExecConnect Denver.

•  Ken's experience in investment banking, private equity, and private company board membership has allowed him to see a number of successful and unsuccessful ventures and organizations.  His experience led him to study and research organizational development, human capital development, and modern leadership theory. He has written a white paper and articles on the subject and studied the use of facilitation in leadership training, both academically and professionally.

•  Subsequently, for KLG clients, Ken uses cutting edge assessments, facilitative training, and coaching to help all types of organizations remove impediments to success and increase performance.

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What is orgd

•  Organizational development is an ongoing, systematic process of implementing effective organizational change.

•  It is interdisciplinary in nature and draws on sociology, behavioral psychology, and theories of motivation, learning, and personality.

•  Organizational development is a growing field that is responsive to many new approaches including Positive adult professional development.

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The purpose based org chart

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What’s Lean got to say?

An Organization's Purpose –

Provide value to customers in order to prosper.

Lean Enterprise Institute

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home depot and the customer

“We removed tasks. For example, we replaced more than 200 weekly reports and e-mails with one, single-page weekly scorecard. Reports don't buy hardware; customers do, so I wanted our associates focused on customers. We backed that up with training and rewards, working hand in hand with HR.”

Marvin Ellison, EVP Home Depot 6

Assessing Culture

•  What is the as is state- WIFME or Customer Focused

•  Custom Stakeholder Survey (Must be Anonymous and data safe)

•  10 Scale and text box answers

•  Must ask key questions about perception of products and services

•  Must ask key questions about leadership and management

•  Must ask key questions about voluntary turnover indicating behaviors and presentisim

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Its Starts with Leaders

•  Decide to create the culture-

•  The leaders of an organization must decide that customer service will be a top priority. They need to establish this culture at all levels. The decision will come from the top of the organization and permeate through all levels. It must be done on purpose.

•  Michael Ray Hopkin

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Leadership teams and the bench matter

According to McKinsey and Company Building trust and leadership skills helps merging companies

exceed their value-creation target by 30 percent. 9

Assessing leaders and the bench

•  Evidence based normed assessments

•  Look at leadership potential

•  Predictive of behavior as a leader especially the ability to drive change

Also use-

•  360° Surveys of leadership skills

•  Evidence of leadership readiness and identification of skill gaps

•  Deliverables to HR and Senior Leadership.

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Leading through Change

Culture transformations are huge change events!

Leaders set the limits of success in their organizations by how they

manage change.

(Research by JG Bruhn- Health Care Management)

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Making Cultural Change Happen

•  Leaders are constantly challenged with the daunting task of managing ongoing change and transition.

•  Not only do they need to cope with the structural side (creating a vision, reorganizing, and restructuring), but they are also on the front lines of the people part of change (grieving, letting go, building hope, and learning).

•  HR professionals can help leaders and managers throughout the organization, make change happen.

-Kerry Bunker, Leading Through Transitions

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Aligning Interest

•  Align interests to responsibilities where possible. Know the core interests of your top employees. What naturally drives someone and what is innately rewarding to them is so powerful. As a manager, it’s your job to identify those interests and channel that employee’s intensity to the right priority to create a frictionless output opportunity.

Anthony K. Tjan, CEO, Managing Partner and Founder of the venture capital firm Cue Ball,

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Incentives to change and perform

-The Challenge with Alignment of Interests-

Dependency on Incentives to Embrace Change

•  Financial and tangible rewards

•  Market competitive benefits

•  Recognition for results

Outcome Based

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How Policy can misalign interests

“Many organizations say they respect and trust their people to do the right thing, but they undermine that statement by doing X, Y, and Z. The misalignments exist not because the statements are false: these companies believe what they say. The misalignments occur because years of ad hoc policies and practices have become institutionalized and have obscured the firm’s underlying values.”

Jim Collins-Aligning Action and Values

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Leading through change is not easy

Dr. Kathleen K. Reardon, Dr. Kevin J. Reardon, and Dr. Alan J. Rowe-LEADERSHIP STYLES FOR THE FIVE STAGES OF RADICAL CHANGE

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Leadership style

How Do We Choose?

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The Power of purpose

-Emerging Body of Data Validates-

Leaders who infuse a sense of Higher Purpose into an organization drive performance by

multiples.

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The Data

Kouzes and Posner’s research showed that companies when compared to their competitors without higher purpose:

•  grew revenues more than 4X

•  created jobs 7X faster than their competition.

•  grew their stock price 12X faster than those without values and purpose.

•  created 750% higher profit growth

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Exponential

•  Dan Pink: MIT’s and the Federal Reserve’s research shows that money is a less effective driver than purpose in high cognitive functions. Dan Pink's Video

https://www.youtube.com/watch?feature=player_embedded&v=u6XAPnuFjJc#

•  In Built to Last, James Collins and Jerry Porras: Purpose driven companies outperformed the general market and comparison companies by 15X and 6X respectively.

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Across Financial Metrics

•  In Corporate Culture and Performance, Harvard professors John Kotter and James Heskett found that, compared to their peers-

•  400% higher revenues

•  700% greater job growth

•  1,200% higher stock prices and

•  Significantly faster profit performance

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Counter intuitive

In Firms of Endearment, marketing professor Rajendra Sisodia and his co-authors-companies that put employees’ and customers’ needs ahead of shareholders’ desires-

•  outperform conventional competitors in stock-market performance by 8X.

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Spence Sums it Up

Leaders who have a clearly articulated purpose and are driven to make a

difference can inspire people to overcome insurmountable odds!

Roy M. Spence Jr. in It’s Not What You Sell, It’s What You Stand for.

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purpose Based Organizations

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How to infuse Purpose

Organizational Leaders

•  Trained in a proven leadership behavioral framework

•  Train the next generation of leaders in the same framework

Leaders create a culture of purpose, your chosen purpose.

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The Framework

•  30 Years of Research

•  Validated across geographies and industries

-Based Upon-

5 Practices

10 Commitments

30 Behaviors

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The practices

•  Inspire a Shared Vision

•  Encourage the Heart

• Model the Way

• Challenge the Process

•  Enable Others to Act

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Inspire A Shared vision

Name a Favorite Vision Statement

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One of My Favorites “A World Free of MS”

The National MS Society

-Why?-

•  Bold vision

•  Personal alignment

•  Not time bound -Celebrate small wins -

It’s a noble world changing goal that gives purpose to difficult and sometimes thankless

work. 29

Encourage the heart

•  Make expectations clear -up front

•  Celebrate small victories and

small demonstration of stated values

•  Personalize the recognition

•  Make it quick-small lag time

•  Say Thank You

•  Show trust in your team

•  Don’t set people up for failure or only look for problems.

•  Make standards known and standardized

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The Heart Motivates

Can you name a boss who encouraged your heart?

Did they align their vision with your dreams?

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• A shared noble vision gives inspiring meaning to work

•  Skill + Passion drives peak performance

Inspired people with noble purpose they believe in and love, can achieve

incredible results

Love The Work

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Model the way

DWYSYWD

• Do, what you say you will do!

• Credibility matters!

• Lack of trust in Leadership reduces-commitment and effort

• Follow through and execute

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Core values

•  Titles denote implied authority

• Values create earned authority

• Organizational and Personal Values Must Align

•  Leaders must model and instill values

• Values drive behavior

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Core values- employee commitment

Personal Values Clarity Drives Commitment

Clarity of Personal Values

Values Drive Behavior

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Challenge the process

•  Leaders search for opportunities to change the status quo.

•  They look for innovative ways to improve the organization. (process and technology)

•  In doing so, they experiment and take risks.

•  And because leaders know that risk taking involves mistakes and failures, they accept the inevitable disappointments as learning opportunities.

•  They ask-What can we learn? Instead of affixing blame.

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ways to challenge the process

•  Survey Customers and Employees

•  Innovation Strategy-Have One!

•  Lean Interventions-Kazien Events

•  Facilitate constructive internal debate!

• Know your competition

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Enable other to act

•  Leaders foster collaboration and build spirited teams. They actively involve others.

•  Leaders understand that mutual respect is what sustains extraordinary efforts; they strive to create an atmosphere of trust and human dignity.

•  They strengthen others, making each person feel capable and powerful.

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Open to new ideas

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Develop your people

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Build competency for the purpose

•  Ongoing development in a workforce requires a continuous and focused flow of training to your people.

•  While the added value makes your people more interesting to your competitors, it makes them less likely to leave since they will recognize that the benefits from working for your company are far from purely financial. This is true alignment of interests.

•  Finally, the ‘process’ nature of development makes your people far more flexible and the business less prone to the disruption caused by staff leaving.

•  People want to make a difference and showing you care enough to help them have the skills to make a difference, makes them more committed and more productive.

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Development and Turnover

Employee education has shown to reduce voluntary turnover by as much as 50%. -New England College of Business

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Presenteeism

•  "It's a vicious circle that leads to Presenteeism, rather than absenteeism, and lower productivity. Crucially, this lower productivity fuels the new top source of stress, which is not having enough time to complete their job. On any given day, there could be hundreds of thousands of people at work who are there in body, but not in spirit.”

•  Professor Cary Cooper, professor of organizational psychology and health at Lancaster University

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The Ivey Business Journal

•  Leaders should provide challenging and meaningful work with opportunities for career advancement. Most people want to do new things in their job.

•  Good leaders challenge employees; but at the same time, they must instill the confidence that the challenges can be met.

•  Not giving people the knowledge and tools to be successful is unethical and de-motivating; it is also likely to lead to stress, frustration, and, ultimately, lack of engagement.

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What does jack welch say?

“When you become a leader, success is all about growing others. It’s about making the people who work for you

smarter, bigger, and bolder.”

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Hands On

•  Indeed, leaders who take the time to understand the needs of their employees can provide them with the support they require to press ahead, to deal with the challenges or issues that might be holding them back from achieving their goals.

•  By understanding and providing employees with what they need to succeed, leaders can build a sense of trust, thereby strengthening the relationships they have with their employees and consequently, the relationships employees have with one another, leading to greater collaboration and improved productivity.

-Tanveer Naseer- Canadian Leadership Thought Leader

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Engagement and purpose

Each interaction with an employee, discussing their needs,

gives a supervisor, manager or leader a chance to align that

employee’s individual goals with the greater purpose of the

organization.-KLG

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The 5 practices

•  Inspire a Shared Vision

•  Encourage the Heart

•  Model the Way

•  Challenge the Process

•  Enable Others to Act

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Our belief

Great Leaders Can Create

A World Without Organizational Dysfunction,

Where People are Inspired to Achieve.

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No matter

Whether you are:

• Coaching for performance improvement

• Going through a merger integration

• Conducting performance reviews

•  Looking for a new member of your leadership and/or management team

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Our wish for you

Many Perfect Days!

Thank you for your time!

Questions? 51