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Screen Shot 2018-01-31 at 4.37.49 PMFor Every Action, There Is A Reaction: People, Process, Policy…

Sir Isaac Newton, my fellow alumni at University of Cambridge (admittedly, a few years ahead of me!)…

If only he knew the extent of application to his theories  – business operations in this instance. More about Newton’s Third Law shortly…

As we look forward, it is helpful to also look back and gain perspective. Today’s business operations are even more complex than two years ago… yet they are typically more aligned and proactive than they were five years ago. We are making progress, but there are still critical challenges to address.  Organizations are still not working at maximum capacity… experience tells me we can do better.

Typically, even though organizations may be consolidating for cost management and scalability purposes, the walls of the individual functions, channels and regions have become even thicker. As a direct result, it is harder for you, as a leader, to build end-to-end value chain functionality in ever-changing, complex organizations. It has become increasingly difficult to gain consensus and approval – both on specific, focused initiatives, as well as broader organizational change.

This is not a technology, process or policy problem – it is a people problem:

People make purchasing decisions…

People change processes…

People establish policies…

People change procedures…

People make budget decisions…

People decide to build and maintain organizational silos…

Although we tend to observe and react to events (or the fires they cause), it is critically important to really look at and assess the root cause of your problems. Go ahead, rip that band-aid off and look at what is really causing the infection –

Your “Core System” May Be Flawed

Recently I was speaking with a client in the SCM space. He was trying to understand why he could not consistently get the  business results he was looking for and wanted to discuss how he could drive change to achieve his objectives. What did we find upon examination?

Just as Newton predicted (yeah, that guy again) – For Every Action There Is A Reaction.

Organizations are designed as “systems” – a set of interrelated and interdependent elements and subsystems to form a cohesive whole. Bottom line: Many organizations are not designed for effective interaction and optimization – the “System” is often broken. Units within the system are not designed to function as single systems unto themselves.  Organizations are made up of many moving parts. If one part of the system is altered in any way, chances are it will affect other aspects of the business.   It is critical to organizational success that each business partner across the organization recognizes and optimizes as a part of the bigger whole. Instead of deploying processes, policies and technologies to leverage various forms of improvement across the wider organization, business units often do not consider the “ripple effect” that will occur when independent changes are made.

In addition, frequently there is a tendency to attempt to lay new tools and technologies on top of old policies and procedures that worked for a specific business purpose in the past – without the support of the people and other units that are affected. The reality is that time and effort must be invested to understand why old practices are failing, how any changes will impact the existing business and who it will affect outside of the immediate environment of the implementation.

Making the poor assumption that a new process or technology will fix the problem instead of understanding that no policy, process or technology change can be successful without recognizing the people component… and the system as a whole, is fruitless. As a result, my client was not realizing the potential value of interconnected organizational change.  Ultimately, we partnered to create a plan around “systems thinking” that incorporated not just his division, but the organization as a whole. He was able to leverage his new knowledge of “the system” to work across functions, channels and regions to get the very best from the system as a whole. As a result, he is now seeing strong, consistent results on a global basis… and the business is growing quarter on quarter.

Interacting With The System As A Whole Provides A Distinct Advantage.

My client is not unique in his challenge – the lack of a systems approach is pervasive in most organizations – just as sub-optimal business results are. Many leaders implement policies, procedures or technologies without ever looking at them in terms of the effects on the “system” and its people… and then wonder why they have not gotten the results they anticipated. Millions of dollars are wasted each year on failed projects for this very reason.

The reality is that today the average company has variant policies, procedures and technologies across the different functions and channels that preclude them from realizing exceptional results. Leaders typically focus only on their area of responsibility. Critically important, to be sure. However, the challenge in this approach is that your organization may have channels or functions that operate well in and of themselves, but they don’t integrate well together. Consequently, the organization suffers as a whole.

Progressive Leaders Are Recognizing How Important Aligning The Various Parts Of The Organization, And The Interrelations Of Those Parts, Is To Their Success.

As one of those leaders, you need to ensure your focus is on matters of ongoing organization and feedback. You need to diagnose problems, not by examining just your piece of the organization, but by recognizing the larger patterns of interactions between the parts of the integrated whole:

  • Focus on the outcomes you want from the organization in terms of the customer and your overall business results
  • Work backwards from your ultimate goal to determine what you need from the system to succeed
  • Understand that you are not an island and in order to be successful, you need to consider and integrate all the moving parts

While most of us like to consider our business as unique and different, the reality is that the more congruency you build into your organizational systems, the more you increase efficiency, visibility, innovation and knowledge management… and the more potential you have to maximize your business results. Think SLA’s, MOU’s, Partnerships – and systems.

Understand, at the end of the day, every action you take creates a reaction somewhere else in the system – people, process and policy. The bottom line of systems thinking is leverage – seeing where actions and changes can lead to significant, meaningful improvements – BUT understand those same actions and changes will have impacts on other structures and people throughout the system. Your overall success depends on the quality and quantity of the interactions within the system’s components.

While there may be functional or cultural differences across the spectrum, the more you can partner to translate and align, the more likely you are to succeed on a grand scale. Work hard to understand your counterparts and build consistent policies, procedures and technologies together. Each and every disparate instance adds to the challenge of building effective solutions that support holistic planning and deployment.

What do you have to gain in addition to the obvious? How about:

  • An Innovation Incubator
  • Connectivity That Breeds Efficiency
  • Cross-functional/Vertical Leverage
  • Improved Business Results Across The Board
  • Competitive Advantage Fueled By Solving Customer Issues Efficiently & Effectively

How Can You Contribute To Creating An Effective “System”?

Please engage the discussion and let us know how systems thinking can help you to exceed your potential. Need A Trusted Advisor to help you become the very best leader you can be while maximizing your organizational results? Contact me at SheriLMackey@gmail.com.

DDI’s Global 2009 Leadership Study  indicated that 37 percent of leaders filling global leadership roles fail.  These leaders failed to achieve their global objectives and, most commonly, left the company – unsuccessful. “Clearly, something is wrong worldwide with leadership development…”, reports DDI in its 2009 Global Leadership Forecast. But what is being done about this epidemic problem?  I repeatedly hear people willing to state the problem, but very few who actually propose and facilitate solutions.

After 20+ years of working in global business, and several more coaching global executives, I am repeatedly asked what is needed to facilitate success in global environments. I can tell you that it is not fancy terms or academic theories that move executives forward – but it is the ability to take reality-based theories, put them into layman’s terms, and apply them into real-world scenarios – while simultaneously  incorporating some less obvious skills that are not necessarily taught in business school.

I can provide you with the basic components I use to evaluate the likelihood of leadership success in the global marketplace, as well as the competencies I seek to further develop/position executives for global success. It is by no means a formal, definitive “global leadership” list of competencies, as the challenges are always very complex and involve a mix of both hard and soft skill development, but it is a methodology to leverage when evaluating global executives or  partnering with them to further individual or group development. The reality is that I am a practitioner, not a scientist – and I promote and teach what I know through real-world experience.

For each of the next three weeks, I will cover one of the three core components that I know from experience are essential to global leadership success (Intellectual, Psychological, and Social)  – followed by a discussion specifically on those more covert competencies that are critial to global leadership success.

This week we will look at the first component: Intellectual Acumen and it’s corresponding subsets:

  1. Intellectual Acumen: Understanding how the business works on a global scale / having the functional and market competencies to succeed.
  • Business management capability: Is there a capacity for strategic decision-making, functional expertise, efficient resource allocation, effective time management, problem-solving ability, ease in managing complexities, and ability to stay flexible? Can the executive adapt his/her leadership style to a variety of situations?
  • Global business knowledge: does the executive know how the business/industry works worldwide? How global customers behave across various geographies? How competition targets global clients? How strategic risk varies by geography? Is the executive mindful of diverse business protocols and legalities across areas of responsibility on a global basis / how it effects the overall business?
  • Cognitive complexity: does the executive have the ability to relate diverse scenarios with many moving parts without becoming overwhelmed? Is s/he aware of corporate/proprietary competencies that include navigation of internal culture, institutional business protocols, and proprietary skills that affect the global business?

It is rarely a simple matter to assess the right competencies for a global leader, and is very situational.  From my experience, intellectual acumen is the basic starting point for global leadership success. Although a significant portion of intellectual acumen is gained through education and organizational experience, if the basic competencies are not present, and incredibly strong, the leader has failed before s/he ever begins. If these elements are present, but need development or refinement, more than “traditional training” methods are required. These are longer term, organizational integration issues, which if not incorporated through sustained, continual, coaching and reinforcement, will ensure that the failure rate of global executives will continue to soar – a key contributor to global organizations inability to achieve their potential. I have seen it time and again…

How would you rate your global intellectual acumen? If it is not where you need it to be, what are you going to do about it?

You can contact me at Sheri.Mackey@LuminosityGlobal.com or by visiting our website at www.LuminosityGlobal.com. Check back next week for the next installation  of Leadership Across Boundaries & Borders. 59DCENEFB9N7