Process reviews make not an organisation improvement system!

IMG_6898[1].jpgThe most common observation in my consulting practice is the claim that process reviews conducted by an “intervention group” are the organisation’s improvement system. Unfortunately on their own process reviews will only solve point in time problems.

Process reviews can be very effective interventions to improve a process and many process reviews combined may cover much of the organisation. However the outcome is usually a temporary or even a permanent improvement that plateaus very quickly. That is because an organisation, like any living thing, has an immune system that will fight off foreign bodies and seek to maintain the status quo.

The immune system should not be considered as “resistant to change” or “acts of sabotage of the program.” It is how systems work and we should be grateful for its existence. Rather the intervention team should consider what makes up that immune system, how to temporarily dampen it to enable the intervention to take hold and finally how to re-engage it in a way that it now supports the changed organisation.

There is no one way to achieve this outcome but there are a few principles that should be considered:

  1. Treat people like adults and respect their position. There is normally a very good reason for it.
  2. Be clear on the intent and live by it.
  3. Design the intervention in a way that builds demonstrable, and well-earned trust with those affected by that intervention.
  4. Adopt a learning posture to the program balancing EQ/IQ.
  5. Be the catalyst. It is not your party.
  6. People need to experience what “it” is, not be told what “it” is.
  7. The teacher arrives when the student is ready.

These are the main ones. I am sure you can think of others. Living these principles within the intervention should lead to a well formed self-sustaining system.

It is much easier to run a process review than to build a true improvement system. It is a bit like chess. The rules are simple but the strategies are not! Those that have mastered the strategy  reap deep rewards in customer experience, employee engagement, productivity, profitability and change agility.

Take the plunge and go all the way!

 

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Process reviews make not an organisation improvement system!

The Missed Phase of Post-Merger Integration

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Despite well documented processes to execute a Post-Merger Integration (PMI), there is still serial under-performance against expectations of this transformation strategy. Some estimates are as high as 70% of mergers and acquisitions fail to meet their original business case. Various studies suggest that the strategic logic, financial assumptions, cultural fit, implementation execution etc. all play a role in that under-performance.

However, even if all these things are done well, there is still a critical phase not addressed in many  PMIs.

You need to have experienced a PMI first hand to understand how challenging an environment it really is:

  • The intense pressure to achieve the estimated synergy targets embedded in the deal whether they are reasonable or not.
  • The fast paced nature of analysis and decision making inherently means many suboptimal decisions are made.
  • The necessary breaking of many well-established operational processes and relationships and the establishment of new ones.
  • The dealing with cultural challenges of fierce competitors now expected to collaborate effectively.
  • The need to remove uncertainty quickly to reduce the anxiety within the combined organisation and move to a more normal operational footing.

By necessity it is an imperfect process and numerous things are left to be done. Unfortunately, many organisations declare victory once the financial synergies are achieved, move to a “Business as Usual (BaU)” footing and fail to reach optimum performance. However, BaU conditions are rarely conducive to completing the remaining activity.

It is important to recognise and agree there is unfinished business, agree the priorities of what to achieve next and how to achieve it, an ongoing sense of urgency, an effective process to execute and most importantly broad empowerment to act. This should be identified as the business optimisation or business improvement phase of the integration.

The tragedy is that by the time the Executive Committee recognise there is a problem the PMI infrastructure has been dismantled and implementation momentum is lost.

To improve your PMI performance consider the following:

  1. Define PMI success internally as “reaching optimal operating conditions.” It is important to go beyond the achievement of synergy targets.
  2. Design into the PMI process an optimisation/ operational improvement phase so the whole organisation understands this to be the end goal and will work towards it. Allow the design and execution of the early phases to be refined with this objective in mind.
  3. Celebrate success at each phase of the PMI to mark the milestone, allow closure and refresh for the next phase. This is important to manage change fatigue.
The Missed Phase of Post-Merger Integration
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