Category Archives: Managing Change

Office Politics

Someone asked me the other day: “Mark what do think is the biggest challenge for small businesses today?”

I didn’t have to think about this very long. I know they were expecting me to say something about: the affects of the economy or the stock market or the impact of technology or the lack of funding or resources or even the breakneck speed which we are expected to operate at.But the reality is that these are relatively minor forces when compared with the most powerful force of all:Office Politics!If you could walk with my consultants and I, in and out of businesses we each see everyday you would see the obvious yet devastating result of office politics. I believe it is by far the biggest obstacle to change and growth for companies today. Not that this is new. Office politics has been with us for decades. But the changing financial, political and social landscape makes it more insidious than ever and literally threatens the survival of many small businesses and even larger organizations.Why? Because of the exorbitant cost associated with office politics.The cost of office politics is a kind of activity-based cost. It includes time lost, waste of resources, low staff morale and ineffective delegation. Some of these costs are tangible but not accountable. Often time this kind of loss is ignored or neglected. Since many political activities are cross-departmental, office politics can render an organization completely dysfunctional in a very short period of time. While it is usually unwise to let office politics freely develop, unfortunately many companies cannot tackle such a political problem and let it erode their productivity and profitability and sometimes even endanger their survival.Office politics is about the application, distribution and negotiation of power and resources in an organization. This power includes authority (formal power) and influence (informal power). Politics is basically the application of that power. The desire for power is determined by one’s personality. Leaders can affect this principal in every organization. Strong, ethical leadership regulates the application of informal power (i.e. influence) to avoid the overuse and abuse of authority. Abuse of authority will lead to a chain of negative effects such as low staff morale, conflict, bias, bad image, poor communication, dishonesty and social conflict.When ethical leadership exists, office politics will abate. This is because ethical leadership is essentially self-management and self-control as an example for subordinates to follow. It is the strongest influence for change in any relationship. As I’ve said before, leaders act the way they want their team members to act. Cultural actions cannot be ordered or commanded. Most political office issues are symptoms of weakness at the senior management and organization level.While every organization is different, most have some type of definable culture. Some call this the organization design. It is essentially referring to the general distribution and structure of authority, responsibilities and resources in the organization. Poor organizational design is a common cause of office politics because ineffective organizational structure allows too much room for the negotiation for authority and resources.The organization chart in the business leader’s mind is far more important than the official one. Ricky W.O. Lau, author of Politics in Business calls it the “hidden organization chart.” Often times this means that the leader has bias and personal favor to individual members but does not act openly and his delegation is based on the hidden organizational chart rather than the official one. This is a common yet unfair and very detrimental management practice.While delegation is the distribution of specific work, responsibilities and authority, in an effective organization, delegation must be based on the organizational structure. Otherwise, there would be structural overlap, confusion, conflict and politics. Conflict usually involves different interests of different people (especially in different departments). Conflict may be minimized if the focus is on the whole organization rather than individual department or individuals. Some management styles may easily lead to office politics because the focus is on the performance of individuals and departments rather than the organization as a whole.Certainly interdepartmental conflict cannot be completely eliminated. Nor should we attempt to do so. It is important to remember that disagreement is not equivalent to conflict. People may disagree or criticize others if:

  1. They view the matter from another viewpoint
  2. They have misunderstood other’s meaning
  3. They want improvement
  4. They want to challenge others’ position or power.

Out of the above four motives of disagreement, only the last one is the result of conflict and is a political motive. However, when a manager is too politically sensitive, he may mistakenly treat the first three motives as political motives, and interpret the conflict as an intention to challenge his position or power.Desire of power may be a strong motive to perform, but it may also lead to a negative and destructive result. An effective manager should apply his influential power rather than authority because abuse and overuse of authority can lead to poor relations, distrust, misunderstanding and disorganization.Are office politics an issue in your business? If any of these symptoms are present in your business, its time to think about making some core changes to your business culture. At the Small Business Advisory Network we like to say that we influence decisions, improve performance and inspire change. That’s what our consulting, workshops, web site, weekly articles and The Small Business Hour Radio Show are all about.

Failing to Fail

Are you doing the same things you did a year ago? Are you doing things the same WAY you did them a year ago? If so you’re bound to fail. Not that failure is bad mind you. The sooner you fail in fact, the better off you’ll be. So raise a glass with me and let’s toast all of our failures past, present and future! Ahhhh drink deep. Now wasn’t that thirst quenching? No?

Let’s face it, our culture doesn’t reward failure. We condemn it. Our condemnation is so prolific that most folks do whatever they can NOT to fail. They shudder to even speak of a failure to associates. They train themselves in fact to not even THINK about failing. It’s not an option! We walk around telling everyone who will listen to us about all of the great successful things we have accomplished in our lives. We have convinced ourselves that we must continue to succeed and more so, that we must become innovators.

Innovate or Die 
In fact innovation has become kind of a buzz-word in our society. We hear, “innovate or die.” What about “innovate AND die?” All the excitement about all things new has obscured the fact that most new ideas fail while most old ideas are still with us. With hundreds of breakfast cereals introduced every year how could it be that Cheerios and Wheaties still outsell them all? Why are Beanie Babies a faint memory yet Play-Doh is still a best seller? Evolution? Survival of the fittest? Maybe.Is there a way to combine innovation with proven methods? We’re all familiar with the old Rudyard Kipling quote: “the definition of insanity is doing the same thing the same way time after time and expecting a different result.” In this shrinking economy, it stands to reason that we need to do things differently. We all know we have to get creative, but how? How can we harness our creativity to create success rather than failure? Or better yet how can we train ourselves to endure our failures yet remain focused on the hope of a successful outcome?Not Creativity but Productivity 
The truth is that creativity is less about wild talent and more about productivity. To find a few ideas that work you need to try a lot that don’t. Successful people don’t have a higher success rate. They just do more and they do a range of DIFFERENT things. Research shows that the success of individual geniuses like Mozart, Shakespeare, Picasso, Einstein, and Darwin himself, is best understood from an evolutionary perspective, where excellence results from “a range of differences.” These famous creators generated a wider range of ideas and completed more products than their contemporaries. They also followed proven methods in order to accomplish them. They didn’t succeed at a higher rate than others. They simply did more. So they had both more successes and more failures.An Example 
A similar philosophy helps explain the success of Capital One, which has been called the most innovative credit-card company in the world. Just a few years ago, all credit cards were pretty much the same; you could have whatever you wanted as long it cost $20 per year and had an interest rate of 19.8 percent! Capital One has been the leader in offering thousands of different credit cards, with varying rates, and limits, which are targeted at people with different beliefs, hobbies, and affiliations: “They tinkered with credit lines, mileage awards, with the design of the cards, and with the color of the envelopes of their mailings. They tried different ways of retaining customers and pursuing deadbeats. Essentially they made Capital One an endless experiment.” The company tried about 45,000 experiments in the year 2000, for example. Capital One has succeeded by targeting smaller and smaller audiences for these experiments, like a “platinum MasterCard for middle-income hikers who drive Saturn automobiles.” Most of these ideas fail, but the constant experimentation with one variant after another, and constant learning, are big reasons why Capital One has over 30 million credit-card accounts.Repackaging the Old 
The other thing about innovation and creativity is that success is not usually the result of totally new ideas as it is the repackaging of old ideas in new ways, places and combinations. IDEO which is probably one of the most innovative companies in the world, has developed more than 4,000 products for firms in all kinds of industries. Their designers are constantly mixing and matching technologies to produce creative new solutions. One IDEO development group got the idea to create a “slit valve” for a bicycle water bottle out of a heart valve that was made for a medical products company. Henry David Thoreau said, “The question is not what you look at, but what you see.” When you look at your product or service offerings what do you see? What do your customers see? Better yet what should they see?Challenge Accepted Practices 
Often times ideas that are born from this kind of haphazard creativity are diametrically opposed to “accepted” practices. Entrepreneurs start new companies partly because they are purported to be more innovative, free from the pressures in established firms to follow ingrained precedents. Yet entrepreneurs can fall prey to ingrained habits just like managers in big firms. Don’t be afraid to challenge accepted practices. I’m not talking about a free-for-all but rather controlled experimentation in order to cultivate innovation. Some of the greatest inventions in the world were a result of an extra component here and there pieced together. Thomas Edison said, “To invent, you need a good imagination and a pile of junk.”Here’s some advice that will help to promote creativity and innovation:

  1. Expose yourself to new ideas. Increase the variance of your available knowledge. Study other industries that face the kind of challenges you face.
  2. See old things in new ways. Don’t just get OUT of the box. Walk around it. Look at the top. Don’t be afraid to pick it up and look at the bottom.
  3. Break from the past. Stop talking about your past successes and hoping the history will repeat itself. We stand in a new place today a place we have never been and will never be again.
  4. Understand that creativity as all about productivity. Be willing to turn the focus to more rather than better at times.
  5. Embrace failures. Reward failures. Plan to fail – knowing that success in just one more failure away.
  6. Challenge accepted practices. Become a tinkerer.

Play with these ideas in your mind and experiment with a few in your company. Treat them like toys that you might buy to mess around with: Try to break them, try to take apart the pieces to see how they work, try to improve them, and mix them (or parts of them) with your other toys. I offer these ideas not as immutable truths, but as methods that have helped other companies produce beautiful and profitable mutations, and that just might help your company as well.

Standard of Care

For several years many small business owners have asked me the same questions:

“How can I grow my business without significant capital investment?”

“What can I do to stabilize the trends in my business?”

“How can I out-market my competition in the midst of price erosion?”

“How can I maintain a consistent level of revenue to ensure a consistent level of profit?”

“Why are my people loyal one day and turncoat the next?”

“What can I do to motivate my staff to invest more time and effort in effectively selling or delivering my product or service?”

“How can I eliminate excuses and inspire commitment?”Because these are the most frequently asked questions, I have invested considerable time and effort in seeking out the EXPERTS and learning their methods in dealing with these challenges.I have made it my mission to vigorously study the masters in management, sales and marketing. The philosophy that I espouse is an amalgamation of what I have learned DIRECTLY from the leaders in business, such as: Tom Peters, Jack Welsh, Stephen Covey, Peter Drucker, Zig Ziglar, Tom Hopkins, Jay Abraham, Tony Robins, Morris Shechtman and many others. I have found that while these business gurus have different approaches, they all seem to agree on six absolutes of successful business management in the 21st Century:1. We are entering an age of uncertainty, expanding knowledge and unrelenting change.
For these reasons, what worked in the past will no longer work in the future. Even the most successful companies must commit to continuous improvement. Uncomfortable introspection must become a habit – -a willingness to eliminate dysfunctional behaviors, and a determination to model a culture that can tolerate unpredictability, uncertainty and vulnerability. Old methods must be torn down and new paradigms constructed.2. “WHO we are” is far more important than WHAT we do.
The increase in knowledge and change has created an “Intra-personal Revolution.” Individual performance and quality of life will reach new heights by focusing on the internal frontier within each person. A good product or service is no longer adequate. We must leverage relationships and personal values to gain cooperation and market share. Leaders must first change BEFORE they can expect their team-members to change.3. Business leadership will be rendered impotent without deep commitment to a pre-defined, consistent value set.
This focus allows organizations to clarify and act on core values, which will ultimately serve to create a tangible and unified culture. Corporate mission or vision statements will be useless without clearly articulated and non-negotiable boundaries that are enforced and protected. Values without boundaries are merely platitudes. There also must be value consistency between decisions. Strong leaders never have two sets of values to choose from. It is more important to make “value-consistent decisions” than it is to make the “politically correct” decisions.4. Accountability must precede profitability.
Accountability does not exist outside of a relationship. People must be accountable to “someone.” No one can be accountable to himself or herself. This will produce conflict and confrontation but that is not bad. On the contrary conflict avoidance must be eliminated. In fact confrontation is the highest expression of love. Leaders must move from “taking care OF their people” to “caring FOR their people.” In this new culture to demand less from our employees is as unfair to them as it is to our customers and ourselves. There will be no consistent profitability without accountability.5. Peak performance must replace adequacy.
Mediocrity, which has become the standard of performance, must become intolerable. Successful leaders should set expectations high enough so they are just barely within reach. They should demand greater effort, invest more time “inspecting” performance and be willing to confront damaging behaviors and attitudes. This will inspire individual growth. Companies cannot grow unless the people in them grow first.6. Companies must become “learning organizations.”
Leaders and their employees who develop the capacity for self-analysis and adaptive learning will have a remarkable competitive advantage. They will win the battle for mind-share and market-share. This includes quantitative as well as analysis both for internal as well as external elements of the business. When the people within the organization resist learning in place of simply performing job functions, stagnation begins.I have seen what can happen when these six absolutes are satisfied…. Businesses become stable, client loyalty improves, revenue and profits grow, employee turnover drops, new initiatives can be launched quickly and effectively, market differentiation occurs, employees give not out of obedience but out of discretionary effort and there is cooperative, harmonious teamwork. People go BEYOND what is expected of them.This is not a dream. It can be a reality. I have seen it with my own eyes. It is important to understand that this is NOT exclusive to my consulting practice. I know several consultants, like myself, who employ similar tactics with similar positive results. You see, in business, as in medicine there is a new standard of care. It is a standard that focuses on preventative maintenance and improving health rather than merely treating symptoms and constantly fixing aches and pains.But as in medicine, the patient must believe they need to become healthier in order to accept treatment. You may be making money, but this is not the only measure of health. Ask yourself these questions:

  • Are your sales erratic – up one or two months then down for the next few months
  • Are profits unstable or is there a lack of natural growth in the business?
  • Is there a high employee turnover rate?
  • Is there political infighting, blame shifting or a lack of accountability among your employees?
  • Is there an absence of discipline or self-centered attitudes?
  • Have dysfunctional behaviors like dishonesty, insubordination or emotional outbursts occurred in the workplace during the last six months?

If any of these symptoms are present in your business, its time to think about making some core changes to your business culture. These changes begin with the ability to cope with the unrelenting daily change in our economy. They are an outgrowth of our ability to change ourselves first BEFORE expecting others to change. They are interwoven with our commitment to a pre-defined, consistent value set. And they are an example of our ability to hold others accountable for peak performance rather than just mediocrity.

At the SBA Network we like to say that we influence decisions, improve performance and inspire change. Let us know how we might be able to assist you to inspire change in your organization.