Maximizing the Human Potential

Corporate Silos

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Seandrew shaffer consulting corporate silosOver the last few weeks I have had several individuals express frustration about how their business was siloed or stove piped.  This basically means that everyone works within their specific function and ignores everyone else. In fact, in one specific case, it had an employee considering leaving the company. Well integrated, high performing teams and companies cannot operate with this model. Today I am going to talk about the dangers of corporate silos to your business and offer a suggestion for a solution.

Corporate Silos

A few weeks back I talked about Team Integration.  In that post, I discussed the importance of teams working towards a common goal.  I feel this is important to keep everyone focused on the results, and helps people work together better. However, even when everyone in the company and the team is working toward a common goal there can still be corporate silos.  This is evident with statements like:

  • Don’t tell me how to do my job!
  • What do you know about …
  • Stay in your lane!

These are not a sign of a well-integrated, high performing team.

Communication

Companies operating in silos inevitably do not communicate well.  Marketing isn’t communicating with sales. Design working independent of manufacturing. Accounting isn’t communicating with anyone. When communication breaks down, there is a lack of mutual trust and respect. Poor communication will cost your business money.

I have seen where a lack of communication has caused projects to overrun budgets by up to 200% or more. On a project I was working on, one engineer worked strictly in his own silo.  He’d communicate weekly about what he accomplished. But the other engineers, who were using this design, would regularly find things that didn’t work.  Why? Because they didn’t communicate effectively up front so that everyone understood the path forward. They all went about their tasks, and when the two were integrated, it didn’t work and there was a ton of expensive re-work.

Complexity

Siloed companies are plagued with complexity. Why? Because they must add processes and procedures to everything to compensate for a lack of communication.  Does this sound familiar? In these types of organizations, when something goes wrong like supply chain didn’t order the right parts slowing down manufacturing. Suddenly there is a new process for ordering parts requiring four or five signatures inevitably from people too busy and layers away from the actual work. Time is added to the process, and there are more questions which mean a longer process.  Eliminate this with effective communication.

To add to the complexity, managers and leaders will start protecting themselves so they aren’t blamed for the delays. Infighting backstabbing and more bureaucracy can also enter in the picture.

Solution

Change your decision-making process. Include more communication. Develop decision making teams, at the appropriate level, that include a cross function of support. Any and all stakeholders should be included, and if they are not the meeting should be put on hold. Work all scenarios up front. Set expectations and make plans. Many times, especially on time sensitive projects, people just dive in and get started. While initiative is something that is admirable, jumping in without proper preparation is a formula for rework, exceeding budgets and missing deadlines.  Create a culture where people work together, communicate with mutual trust and respect.

This Week’s Challenge

How is your company culture structured? Are there corporate silos and finger pointing, or communication based on mutual trust and respect? Are all stakeholders brought in for decisions or are people just told to live with decisions being made?  Creating the right culture, and integrated culture, will dramatically improve your bottom line!

Give us a call for an assessment and consultation and see how you can start improving your bottom line.

If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.

Is Culture Hurting Your Profits?

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culture hurting profits andrew shaffer consultingTo continue with this month’s theme of the impact culture has on company growth, I will discuss ways culture can be hurting your profits. Every time there is a group of people a culture is formed. It could be a company, private club, church, or civic group. They all develop a unique culture. Last week we talked about how culture can help you through external challenges, this week, I am going to talk about ways to determine if your culture is hurting your profits.

Culture is Hurting Your Profits

We all know that ultimately you need employees to make and deliver your products and services. It doesn’t matter how great your strategies are, your processes and technology can be world class, but eventually you will have to rely on people to make money. When you have employees, a corporate culture will develop. Your corporate culture is simply the way it’s done at any given company. The trouble with a corporate culture is it is embedded into the fabric of your company, and impacts everything from productivity, employee loyalty, customer satisfaction and PROFITS. Here are some things to look for that can indicate you are in need of a desperate culture shift before you find yourself unable to maintain your competitive edge.

Complacency

I touched on challenging the status quo earlier this month, but it is so important that I feel it warrants a second discussion. The idea that “this is how we do it here,” can be deadly. I have seen companies try to break this attitude of complacency by hiring outside people to fill in leadership positions. The theory is they will give an outside perspective and improve profits. The struggle is, culture can be so pervasive and the new leader meets so much resistance, the company quickly goes back to business as usual.

Complacency hurts, because when individuals become complacent, they no longer create and innovate. You either grow or die! Innovation and creativity is what gave you a competitive edge and what kept you in business. I can promise you this, if you have a culture of complacency and your competition doesn’t it is just a matter of time before you are losing market share.

Us vs. Them

Us versus Them is one of the most dangerous culture issues I have seen. This can manifest in a few different ways. It could be individual contributor vs. management, management vs. executives, or department vs. department. In the end, it results in excuses and a lack of accountability. People tend to blame outside circumstances or people for any shortcomings. When this gets to the point where there is an us vs them attitude, internal to the company, it breeds distrust.

Unfortunately, when this type of culture occurs it is extremely difficult to overcome. Once a lack of trust is established, there is no quick fix to reestablish trust. This requires new leadership at several levels, perhaps a management restructure, and time. Recognizing when trust is breaking down is the time to address the situation before it goes too far. How often does your organization, evaluate employee engagement and trust? If you are doing it on an annual basis, you probably are not doing it enough.

Decision Making

Who likes to be micromanaged? Rhetorical question, but just in case, NOBODY! Micromanagement is a sign of a weak culture. The reason a manager would micromanage is a lack of trust. They don’t trust their employees to do their jobs, or don’t trust them to make decisions, or they lack confidence in their own ability to lead.

Managers should be empowering members of their team to make decisions. Lead them to make the right decisions, and trust that they will do what is expected. Now this can’t be blind trust, there has to be some level of accountability, and follow up. But if employees do not feel they are empowered to make decisions, they will become resentful. It is always a good practice to push decision making down to the lowest level possible. Don’t believe me? Well it works for the Ritz Carlton!

This Week’s Challenge

Take stock in your company and do an honest evaluation of your culture. Look for signs of complacency, unhealthy rivalries or micromanagement. Each of these can hurting your profits.

If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.

Use Culture to Gain a Competitive Edge

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Culture to Gain a Competitive Edge andrew shaffer consultingI had the privilege of sitting down with my friend Ben from Global Harvest Networks to share ideas on how to help companies grow. When I first met Ben, his story of growth in his company inspired me, and he hasn’t stopped growing. When Ben and I were talking, he shared that he is always amazed at how his team is willing to step up and take on new challenges. His company has developed a culture that gives him a competitive edge. In light of this conversation I thought I’d share with you how you can use culture to gain a competitive edge!

Use Culture to Gain a Competitive Edge

There are two things I know about your business. First, if you are not making money, you are going to go out of business. Second, your business cannot operate without people. Businesses either grow or die.

According to aei.org: only 12% of the Fortune 500 companies in 1955 were still a Fortune 500 company in 2015. It doesn’t matter how good your product or service is, or how your proprietary information gives you an edge. Without people to sell, develop, and produce the product or provide the service, nothing will get done.

The other little secret, your product or service can be the absolute best today, but if you don’t continuously improve, you’ll soon be left behind. Need proof? Remember the Motorola Razor phone? What happened to Motorola? When I was a kid, everyone in the neighborhood had an Atari 2600 game console. Atari isn’t even in business anymore. Not to mention the number of airlines, car companies, and electronics companies that no longer exist.

Last month we discussed the importance of developing proactive leadership. To take this discussion to the next level, your leaders should be creating a culture that gives you a competitive edge!

Challenge the Status Quo

When you find something that works stick with it. Right? I mean that sounds like good advice. My dad used to tell me, “If it ain’t broke, don’t fix it.” This advice was probably sound, when my dad saw me taking a screw driver to the VCR because I wanted to “see how it works” but this mentality can be detrimental to a business.

I have met business owners that have done a decent job of building themselves a profitable business. However, after several years, they find they can’t increase revenue or market share, and sometimes they are even losing revenue. They call in consultants (like me), and when I suggest making changes to the business model, I get immediate resistance. They built their business doing it a certain way and come hell or high water, that is the way it will be done. In the meantime, their competitors have found a way to solve the same problem cheaper, faster and smarter. Who is going to stay in business longer? Create a culture that is as proactive as your leaders.

Develop Friendly Competition

Anther struggle I see in businesses is a culture of cut-throat competition. I mean that culture where everyone is out for themselves and not for the company? Friendly competition is fine, fun, and productive. It is when the competition is mean, undermining, and counterproductive that it becomes toxic to a company.

Let’s use a manufacturing company as an example. This company runs three shifts a day to produce their product. Management decides to help motivate the production floor, that they’ll have a competition over the next month to see how may products each shift can make. In a culture of friendly competition, each shift would work hard and try to produce the greatest number of products. They would get creative to find more efficient and effective ways. Ideally, each subsequent shift will do this. Each team wins, because they learn how to be more effective and efficient. One team may win a prize (or bragging rights), and the company benefits from improved productivity and profitability.

Now, if you have a cut-throat type culture, the results will be extremely different. Here you may have one shift trying to sabotage the next shift. They could damage or “lose” material. They certainly wouldn’t be creative and find innovative ways to be more productive. In this type environment each shift would be out for themselves, and may even hinder production on the other shifts if they thought it would give them an edge.

This Week’s Challenge

This week I have given a couple examples how a culture can help your business gain a competitive edge. By developing a culture that challenges the status quo. What are you doing well today, and how can you make that better? Develop opportunities for friendly competition. This can be in sales, marketing, manufacturing, wherever. Create a culture that encourages innovative and creative thinking, and watch your competitive edge sharpen!

If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.