ESTIMATED READING TIME: 7 MINUTES
I recently heard an interview with author Horst Schulze(i). Schulze is the co-founder of the Ritz-Carlton Hotel Company and oversaw its rise to prominence in the luxury hotel market.
Schulze talked about the methodology they employed to improve the experience of their customers’ stay at their hotels.
This included empowering all staff (even those at the bottom of the hierarchy, such as cleaners and service staff) with the ability to solve customer problems, the responsibility to ensure resolution of those problems happens and the resources to solve certain problems without even asking (including each staff member having a budget of two thousand dollars, with which to solve customer problems on the spot).
Schulze is seen as a guru in developing a culture of service in the hotel industry.
It got me thinking about how all businesses create and promote a certain culture among their staff. Schulze’s confidence in equipping every member of his staff with the ability to identify, raise, resolve or request resolution to issues ensured a successful company bottom line. That investment did not diminish the company, but built it.
He recognised that problems that go unresolved threaten business assurance.
Taking Schulze’s theory outside of his industry, I began to think about how we encourage cultural change in our clients’ organisations. And the kind of cultural change we encourage includes an openness and positive attitude towards identifying and resolving issues.
Too many companies in which we’ve worked, mostly inadvertently, promote a fear-based culture that encourages the covering up of issues from managers and executive teams. Staff who identify issues are silenced by their managers, who fear for their credibility, and perhaps their jobs, if issues within their portfolio of responsibility are seen by their superiors, higher up in the organisation.
This is a recipe for bad business assurance. Unseen risk is a huge issue for many businesses and a culture that hides issues can’t resolve issues.
As consultants brought in to solve “unsolvable” issues, we’ve been frustrated and heartbroken when we raise the issues that we’ve found with the managers, only to have them suppress this information from their managers because they fear repercussions.
That’s a sure way to create unseen risk.
And that means bad business assurance.
And everyone in senior management should be concerned with business assurance improvement.
Don’t contribute to the problem
If your business has been operating (or you think it’s operating) with a culture of issues suppression, you, as a senior manager, need to start the change process.
How are you responding when your direct reports come to you with issues on which they need help, guidance or advice?
Do you tell them it’s not your problem, it’s theirs? Do you yell and give them reason to avoid telling you in future? Do you threaten and berate, belittling them for having issues they can’t resolve?
Do you actively invite them to tell you what struggles they’re dealing with? Do you have an approachable manner when it comes to their struggles – mentoring not judging? Do you see it as your job to help resolve issues in your department, however many rungs down the hierarchy that problem is?
If you’re not ready to help solve the issues your business faces, you simply will not have solid business assurance.
Encourage your Direct Reports to Manage their Downline Managers Well
Poor quality people managers are often part of the problem. People skills and other soft skills required to effectively perform in positions of management (like dealing with difficult people, gaining trust, having difficult conversations and team building, etc.) are all areas that may need improvement throughout an organisation’s management hierarchy.
But simply mandating training courses for managers isn’t enough.
As a senior manager, the example you set holds far more influence than mandated activities. As such, are you asking your managers how their managers are going? Are you enquiring with them about how well their managers are managing problems and people? Are you helping them identify their own managerial weaknesses, and encouraging them to actively seek to improve?
Changing culture is a trickle down process that requires active engagement from C Suite managers.
Give your Team the Tools They Need
Part of the reason problems never get raised or never get resolved, is that no one high enough up in an organisational hierarchy sees or knows about the problems. So no one with enough power to solve the problem is ever enlisted to do so.
From the perspective of those identifying the issues, this lack of senior involvement in problem solving looks like a management team that don’t care about the business or are foolish.
Needless to say, this does not promote a strong staff morale!
When staff (at all levels) have access to some mechanism for transparent issue management, they are far more likely to raise issues and contribute to the resolution of other issues.
Active participation in issues resolution creates greater ownership of the outcome and can save businesses a lot of money as well.
We worked with one client who was spending a significant amount of money supporting two very similar data collection and storage applications which serviced two separate groups within the organisation. Originally, a single data store had serviced both groups’ needs. That single data store was owned by one of the groups, and they didn’t consult the second when they decided that an upgrade was needed (because they didn’t realise the other group were using the data store).
Consequently, the second group didn’t know the upgrade was happening and had no input into what it would contain. When it was implemented, what they needed was no longer available from the new data store.
One small expansion of the new system could have met their needs, at reasonably low cost. Because of this invisibility, the second group had to implement their own data store, leaving company supporting two extremely similar systems.
If an effective issues management system was in place, the issues that lead to the decision to upgrade the original data store would have been visible to the second group and solutions recommended would also have been visible. If this had been the case, the second group could have weighed in on the proposed solution, had their needs incorporated with a slight adjustment to it and the company would have saved a significant amount of money overall.
When your staff have the tools they need, in this case, a transparent issues management system, your business is more time and cost efficient.
Celebrate Transparency and Resolution Action, not an Issue-free Landscape
When you only celebrate an issue-free landscape you encourage your direct reports, and reports down the line, to hide issues so that the landscape looks issue free.
When you celebrate transparency and resolution action, staff are less afraid to have issues be transparent. They get kudos and celebration for actively finding solutions and moving forward toward resolution.
This subtle change in focus makes a huge difference in how much you know and how much unseen risk you’re living with. As a CFO, you should want to know as much as possible and have as little ability for unseen risk to exist as possible.
A landscape that celebrates transparency and resolution action is, however, a landscape that requires senior leadership to have the courage to play the long game.
Sometimes raising issues and finding real resolutions will cost more in the short term. Are you courageous enough to support the business on such a path, in order to secure long-term profit gain? Are you willing to pitch long-term investment in deep business process and protocol support, to your Board? Are you confident enough to take the helm and steer?
Be Interested in Understanding Metrics
As a senior leader, you rely on business metrics to do your job, make your decisions and lead your team successfully. Quality, reliable metrics are vital to your success in your role and are also used to assess your KPI achievements.
Yet many senior leaders don’t really understand the effort involved in obtaining the data that is required to calculate the metrics on which their decisions are based.
For those senior leaders, it’s a matter of trust and assumption.
This is not the way to solid business assurance.
An organisation-wide glossary with quality content, which clearly defines each business metric and how it gets calculated, allows everyone involved, from senior managers down to the staff collecting and inputting the raw data, to know what data is extracted from what place and what calculations it undergoes, in order to create what metric.
With such clear definitions like this established across the organisation, staff at all levels are able to identify and raise any problems they can see with the practice of generating this metric.
In our experience, when such definitions exist, and assuming staff have a solid issues management system in place to raise and resolve issues, businesses see an immediate rapid spike in identified issues. This seems distressing at first, but it simply highlights the amount of unseen risk that the business had prior to a transparent issues management system being introduced.
When that transparency is available, solutions can be found. And that’s business assurance.
We know it’s a big ask, specially for big businesses.
But we also know that it’s possible. It takes a high level senior leader to spearhead the culture change and it takes the right investment and tools, courage and vision.
And yes, we can help you with that.
(i)Miller, Donald (host). Podcast #133 “Horst Schulze – How to lead with vision so your brand stands out.” Building a Storybrand with Donald Miller | Clarify your message so customers will listen. 28 Jan 2019. Available on iTunes. Accessed 30 Jan 2019Join the discussion on LinkedIn
Mark is a co-founder & Chief Development Officer at Intraversed, helping organisations establish the Intralign Ecosystem, an award winning information management & governance methodology, to achieve reliable information, stable tech spend & greater IT project success.
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