Corporate Culture & Operational Effectiveness

Management Challenge

Organizations are judged on their financial performance and therefore, by default so are their management teams. The key for managers is understanding how financial success is measured, impacts on operational performance and the options available to make positive sustainable change:

Traditional Approach

Typically managers tend to think in two dimensions when trying to address the problem. What do I need to change in my operations to achieve the desired financial results?  Timescales may be tight and sometimes the short term needs may outweigh the long term aspirations.  Sometimes short term measures can damage the long term capabilities of an organization. This can become a vicious circle where the law of diminishing returns is compounded by the diminishing options available. If you look at the diagram overleaf you will see a dotted line defined as the Minor Loop where the financial demands of revenue, profit, cash flow and equity are served by changes in operations of the business.  This can be successful but it is a path littered with hazards.

Minor Loop Evidence

It is not simply an opinion it is backed by research conducted by Cameron and Quinn who stated that the three most typical change initiatives conducted by organizations in what could be described as Minor Loop were: Restructuring, Quality Initiatives and Process Initiatives.  Of these at least 75% failed, stalled or did not achieve the desired benefits.   Click here to see a summary of their key findings.   Fortunately, there is also a solution to this age old problem that is supported by empirical evidence.   Click on the solutions graphic below to see how.