| Management Challenge | | | | - Only 20% of TQM initiatives met their quality |
| Organizations are judged on their financial | | | | objectives and 40% were a complete flop |
| performance and therefore, by default so are their | | | | - A survey of senior managers who had been |
| management teams. The key for managers is | | | | involved in downsizing found that 74% indicated that |
| understanding how financial success is measured, | | | | productivity, morale and trust had since deteriorated |
| impacts on operational performance and options | | | | - A survey across 1742 companies in the USA and |
| available to make positive sustainable change. | | | | Europe found that 85% found little or no gain from their |
| | | | effort in re-engineering processes. |
| Typically managers tend to think in two dimensions | | | | Alternative Approach |
| when trying to address the problem. What do I need to | | | | So if this problem exists you may wonder if there is an |
| change in my operations to achieve the desired | | | | answer to it. The answer is yes and it hides in plain |
| financial results? Timescales may be tight and | | | | sight. |
| sometimes the short term needs may outweigh the | | | | The third dimension is the organization itself and its |
| long term aspirations. Sometimes short term measures | | | | culture. The reason it hides in plain sight is that people |
| can damage the long term capabilities of an | | | | are generally aware of it but it is difficult to really |
| organization. This can become a vicious circle where | | | | define, let alone do anything about it. We now have |
| the law of diminishing returns is compounded by the | | | | instruments and methodologies that bring culture into |
| diminishing options available. If you look at the diagram | | | | focus and allow organizations to do something about it. |
| link below you will see a dotted line defined as the | | | | An organization's effectiveness will impact on its |
| Minor Loop where the financial demands of revenue, | | | | operational capability and consequently its financial |
| profit, cash flow and equity are served by changes in | | | | performance. In bringing in the organization dimension it |
| operations of the business. This can be successful but | | | | adds a multitude of options and can provide a shot in |
| it is a path littered with hazards. | | | | the arm to the minor loop challenge described above. |
| Minor Loop Evidence | | | | The organization is generally the origin of the business |
| This is not simply an opinion it is backed by research | | | | performance but is often overlooked as the area |
| conducted by Cameron and Quinn who stated that | | | | where true transformation can take place. The Major |
| the three most typical change initiatives conducted by | | | | Loop described on the diagram link below shows how |
| organizations in what could be described as Minor | | | | it can take place. It even provides benefits against the |
| Loop were: | | | | external issues that can plague operations and finance. |
| | | | Major Loop Evidence |
| 1. Restructuring | | | | If you are still not convinced a ten year study by |
| 2. Quality Initiatives | | | | Kotter and Heskett found that organizations who |
| 3. Process Initiatives | | | | actively managed their culture significantly |
| Of these at least 75% failed, stalled or did not achieve | | | | outperformed those who did not. We would ask you |
| the desired benefits. A summary of their findings is | | | | to look at the main findings below and consider what |
| below. | | | | those findings might mean for your organization. |