During a recent project, I ran into an issue that worried me. Not because of the issue itself, but rather for what it represents. A really big deal was made about wearing the security badge ID’s on a lanyard and not on our belts.
The Lanyard Decree
After the “lanyard decree,” lanyards were distributed throughout our company and a memo was sent out saying that all employees, contractors, and vendors must wear lanyards. Although the lanyards were passed out, we started to notice that, for the most part, not many people are wearing the lanyards. Especially senior leaders…
I was later told the chronology of what led us to our lanyards:
• Someone saw my team without lanyards
• They went to their boss to complain about us not wearing lanyards
• Boss told them to go back to work
• They found an obscure policy stating that all people within the building had to wear lanyards
• Went back to boss and pointed out our violation
• Boss said, even though not a good use of time, go ahead and point it out
• She wrote a memo to the person(s) we reported
• Presto – lanyards…
So after about 10 minutes of calculating, I came up with the following:
• Total time to “resolve this issue” = 2 weeks
• Total hours spent on project = 70 hours (30 just for the person finding the rule about lanyards)
• Total money spent on issue = $15,000 (70 hours at average of about $214/hour, very conservative rate for all levels involved)
• Total return back to shareholders = (-$15,000) – that’s negative boys and girls…
• Positive impact on organization = None
• Value to organization = None
• Impact on advancement of project = None
Simply Maintaining the Same
This is a serious phenomenon that occurs when a successful company forgets, or never really understands, what makes it successful. While becoming successful, they turn their efforts to building infrastructure to support their success.
At some point, the company’s energy goes from becoming successful to maintaining its success; through gaining market share, building new products, etc. – to becoming more efficient, effective, better leaders, etc. All of which are powerful and can make the company more productive, but not as a stand alone.
“How many other “initiatives” are there like the lanyard one?”
At what point does an organization begin to make this kind of work okay? Never you say? Really? Again, using the data from the same unscientific survey, many organizations have these types of “junkets.”
There are some groups within organizations that even encourage them!
The Cycle
Organizations have a tendency, once successful, to focus inwards as much or more than they do outwards. The cycle, which has not been tested but has been researched, has four major phases:
Inception
This is the spark that sets the eventual company in motion. This is generally prior to even thinking of creating an organization, it is the incubation or hatching of an idea or product that sells.
Becoming Successful
The organization is generally smaller and nimble. It has developed a great idea or product. Through things such as hard work and word of mouth. The organization begins to find a level of success that enables it to grow. The organization is focused on selling its service, product, and the customer.
Although this is not the time of “exceptional customer experience,” the organization is laser focused on making sure that each and every customer is taken care of. There is not focus on infrastructure, but the beginnings of “back office” support begins to take shape.
Growing Market Share
• Once a company has reached a sustainable level of success, the focus shifts from becoming successful to increasing the reach of the organization. Oftentimes that involves growing the number of customers that are reached and driving up the share of the market they occupy. In this phase this a focus on building the organizational infrastructure to support that growth and specialization of tasks or roles. Sales focuses on bringing in clients, marketing focuses on spreading “the word” about the organization, customer service focuses on taking care of customer needs, etc.
• Somewhere in this part of the cycle, the focus turns from growing the market share, to internal initiatives. It goes from outward to inward.
• Although there are parts of the organization that still look to the customer, it is all under the veil of “what’s good for the company”. There is growing process, bureaucracy, etc. There are a large number of employees whose roles are to manage or work within some internal function. It is generally as many or more than or the employees that are customer facing (either for service or sales). For example: Credit Card Company – only 15% of their employees have any contact with customers, over 75% of those employees are paid $12/hour or less
• For profit educational organization – 65% of employees have no contact with current or potential students. It is not hard to imagine that if the majority of employees have little or no contact with customers, they would not understand (or care) what the impact of their actions might be. How could they foresee the impact to the bottom line? Experiencing competition.
Changes In the Market Landscape
• With the burgeoning bureaucracy, organizations are often taken back by quick shifts in the marketplace due to changing regulations or competition. Even when the shift is acknowledged or discussed, there is little understanding of how to adequately deal with it because the focus has been off the market and shifted to the internal workings of the organization. This is certainly natural and understandable, but detrimental.
• Too often as the organization is growing it distances itself from how it started to become successful. Of course that is not always the case, but there are many instances where it seems as if “they are making money in spite of themselves.”
• As the market shift takes place, the organization is not prepared to meet it. Mostly because it does not understand what really made it successful in the first place and the long denial that takes place during the decline. There is, justifiably, a focus on self-preservation. The reaction can be to “double down” on methods or efforts that do not reap any benefits.
What Is the Best Way to Avoid “Coasting to the Cliff?”
Always stay on top of why people do business with you. Don’t be fooled by assuming that people do business with your organization for any other reason than the real one.
Key the focus of your organization outward – Make sure there is a clear “live of sight” from each employee to the customer no matter their role.
You must develop employees, make process efficient, and drive profit. It all must be at the service of gaining and retaining customers. Understand that the market is changing all the time. No company is safe from the ever-changing marketplace.
“Organizations that succeed transform.”
As stated so eloquently in the latest issue of Harvard Business Review, companies must understand what is at their core, but be able to transform as the market changes.
Just as steam turns to water and water to ice, companies must understand what “brought them to the dance” and pivot on that to regularly anticipate the changing customer and marketplace.
If you think about it like a company, your prized position in the marketplace with customers erodes.
Are you focusing on what really gains and retains customers? Do you know if your team or organization is headed for the cliff? Are you allowing team members to hang your company’s future on the necks of an albatross with a lanyard? I would love to hear your thoughts!
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This blog also appears on the Linked2Leadership Blog. Please visit them!
Anil Saxena is the President of Cube 2.14, an organizational development consulting firm that works with clients to increase both customer and employee engagement while decreasing turnover, improving customer retention, and increasing profitability within organizations.
Saxena is a certified High Impact coach and trainer and a Joint Application Design facilitator. He is also certified by both Rush Systems and IBM as a focus group facilitator. He is an inaugural member of Northwestern University’s Learning and Organizational Change program, and he earned his bachelor’s degree in mechanical engineering from the Illinois Institute of Technology.
