What are the critical factors impacting on the success of your business? The answers to this question are likely to be many and varied and would probably include: the quality of your products and services, your brand, the buoyancy of the market you operate in, competitive forces and, last but by no means least, your people.
One of our alliance partners, the Hay Group, has spent the last 40 years examining the "people dynamic" within organisations. Their research shows that the environment your people exist and operate in – which we’ll call the organisational "climate" – has a profound impact on the effort they invest into their roles. And the more they invest, the more successful your organisation is likely to be. In fact, having a positive organisational climate has been shown to consistently improve bottom line performance measures by up to 30 percent. (Now tell us one other single factor that has the potential to positively impact your business so significantly!)
So if you accept the above premise, you’re probably asking yourself two questions right now: ‘What does a great climate look like?’ And ‘How do we "get one"?’
As a leadership consultancy focused on helping organisations maximise the outcomes they achieve through people, we spend a lot of time in our clients’ organisations experiencing their climates, diagnosing them and offering solutions to help optimise them. To do this we use a framework that has emerged out of the Hay Group’s extensive research. It identifies six factors that stand out as being the most critical in determining the quality of your organisational climate.
- Clarity: A high degree of clarity ensures that your people understand where your organisation is going and what their role is in helping you to get there. Clarity provides your people with direction, confidence and motivation.
- Standards: If your climate is strong on standards, you would notice a continual emphasis on excellence. There is an innate desire to always want to do better and continue to raise the bar. Standards engenders pride and gives your people something to measure their success by.
- Responsibility: A climate that is strong on responsibility empowers its people to get on with their job, make decisions and get things done. But even more importantly, it holds them accountable for the decisions they make and the outcomes they are expected to deliver. Giving appropriate responsibility motivates people by giving them ownership and removes frustration by ensuing that everyone knows exactly where they stand.
- Rewards: Having an appropriate reward system is an essential component to motivating people. Climates that possess effective reward systems recognise not only the importance of financial remuneration but also the critical contribution that non- financial rewards and recognition play in motivating people and making them feel valued. We all have different preferences for how we like to be rewarded. It is critical that the approach you use is flexible enough to cater for these differences.
- Flexibility: A flexible climate is one where there are no unnecessary rules and procedures. That doesn’t mean the place is a free-for-all but more so that processes are streamlined and no more complex than they need be, resulting in minimal red tape. Flexibility removes a lot of the frustration that is experienced by many employees and empowers people to be creative and innovative in the way they go about their job.
- Team Commitment: A climate that displays a high degree of team commitment is one where people are proud to work for the organisation and willing to go the extra mile when called upon in critical situations. A lot of managers try to build team commitment through "team building" activities (and they do have a place in helping build social cohesion) but the key to team commitment actually lies with the previous five factors. In other words: establish clarity of purpose, establish clear standards of excellence, give people responsibility to act, reward and recognise them for what they achieve and give them the freedom and flexibility they deserve, and you’ll have all the team commitment you could ever want. Satisfaction surveys measure morale but only go as far as telling you what is making people happy or miserable. Understanding the climate within your organisation goes much further, by showing you how your team’s morale is affecting performance and what you can do to create a healthier climate and enhance bottom line results. Next issue, we explore how you create a more effective climate in your organisation.
Red Sky is a consultancy that helps Australian and multinational organisations to maximise business performance by converting strategy into action. www.redskygroup.com.au
Tragically, Paul Laurendet passed away in mid-March, at the age of 42. The Anthill team would like to extend heart-felt condolences to Paul’s family, friends and colleagues, who are understandably distraught at his untimely passing. His profound legacy lives on in his five children, his work and in the memories of all whose lives he touched.