Survive and Thrive (Part II)
In our previous article,
“Survive,” we laid out the case that when a financial organization’s
survival is at stake, surgical cost-cutting is the best of the
least-desirable approaches. This article highlights seven critical
areas for surviving organizations to focus on in order to thrive. In
each of these areas, there are multiple examples where companies
made significant changes to improve their performance.
First, get everyone on
the same page. This starts with a strategic plan that is followed
with the development of performance goals for corporate units, key
individuals, and employee groups. This cascading of goal
responsibility is reinforced with clear and repetitive
communications to shareholders, managers, and employees.
Next, make sure the
organization is delivering value, both to customers and
shareholders. To do this, the organization must be customer focused
and profit oriented. There are two classic ways to stay customer
focused: use feedback mechanisms and have senior management work
front-line jobs from time to time. Additionally, the organization
needs to constantly ensure that they have their ACCT (accuracy,
courtesy, cost, timeliness) together.Finally, the occasional
question needs to be asked: “Is old still valued and profitable?”
Dead wood can still light a new fire.
To assist in delivering
value and ensuring profitability, management information systems
need to be in place. These systems need to deliver critical micro
and macro information in a timely way and be flexible enough to
produce one-off reports. Knowing when and where performance is
sagging and excelling is critical to success. Improving the sagging
performance and duplicating the excelling performance are two of the
best ways to improve overall company performance.
Coupled with goals and
management information systems is the need for standards and
standardization. Operating standards need to be in place and
understood by all employees, whose success is critically dependent
on knowing the correct procedure. Within the standards arena, a
formal process is needed to keep the constantly evolving standards
and operating procedures current.
Next, the organization
needs to be change oriented. Organizations need to be aware of
trends and dead-ends by being organized for improvement. In other
words, making change happen is not “everyone’s responsibility.”
Bringing change into an organization is the specific, direct
responsibility of senior management. Senior management can then task
one or more groups within the company to be the change agents. Many
times these groups are assisted by others outside the organization.
Ideas for change are numerous—developing, selecting, and
prioritizing what to change is difficult—and implementation is
complex and sometimes thankless. But change is an organizational
must and must be specifically focused upon.
Investing in employees
is also critical to thriving. Ensuring that employees are trained to
deliver value and are rewarded for strong performance is all part of
a successful organization. The training (both formal and on-the-job)
must ensure that everyone knows how to do their job in both the
specifics and generalities of their responsibilities. Along with the
training, objective feedback mechanisms will keep employees aware of
their performance. This feedback provides both motivation and
accountability to keep employees on the task of delivering value to
customers—internal and external.
Today’s financial
organization cannot be successful without a strong technology
framework. One common misstep is failing to understand when the
timing is right to move to new technology. Existing and new
technologies alike need to be appropriate, effective, and cost
efficient. Sometimes manual workarounds are better than expensive
new systems; however, all systems need to be easy for the end-user
to operate. Additionally, the systems need to be reviewed to ensure
that embedded functions are being fully utilized. More often than
not, valuable functionality is neglected.
Success within these
seven areas will allow an organization to thrive and financial
success to flow. Recapping, the critical areas are:
-
Get everyone on the same
page
-
Deliver value
-
Have management
information systems in place
-
Have standards and
standardization present and evolving
-
Be change oriented
-
Invest in employees
-
Ensure the technology framework is
effective and cost efficient
