There is a risk that many CEO’S and senior managers take in thinking that they know where the business stands in terms of organizational well-being. Of course good managers review the company’s financials every month, and use KPI’s and dashboards to monitor key performance items. The focus is usually on measurable “performance”.
However there is something that is not reported on in most businesses, and that is communication on organizational issues and general business health, as opposed to financial or data driven performance. These are typically people and operational issues and there are a number of areas where this happens, where management is not informed of, or aware of important matters, and where there is a failure in critical feedback.
Communication on business health can be formal as with regular reports where for example senior management often receives monthly reports that provide basic information but can avoid the hot button issues. Or feedback is informal, where managers expect or anticipate that their staff will keep them informed. This is a risky assumption.
An analysis of over 40 companies in the last 3 years has identified that poor or misleading non-financial or performance communications are a leading cause of organizational dysfunction.
Here are some of the root causes of the problem:
Bad news is filtered
This is often because negative feedback from employees to the top of the organization is manipulated or even discouraged. It is noted that middle managers become really good at filtering information before it reaches the top, and allow only selected, more positive communication to flow upwards. Also weak or underperforming managers do not allow transparency and so defend their unit performance by putting smokescreens or holding back information. Sometimes this behavior is not necessarily ill intentioned, but human nature where the person thinks that maybe bad news can go away.
Organizational silos are invisible walls that are built between departments (for example between sales and production), or sometimes deliberately due to personality differences or disagreements. Communication begins to break down, personality conflicts may develop and the organization begins to struggle with achieving its main vision and mission
Silos can often be created through poor process or systems platforms that don’t facilitate quick and effective cross functional communication. Silos can be the result of geographical separation where one group feels alienated. People tend to become so involved in their own work that they lose sight of the larger picture, and can no longer see another person’s or department’s point of view.
Ultimately an organizational culture will be very negatively affected by silos. They will hamper organisation communications. In turn this distorts alignment to business goals, affects business decision making and can lead to poor results.
Managers don’t listen, or they don’t act
This complaint does not need detailed explanation, because it is evident from multiple employee opinion surveys that across many industries and types of businesses, senior managers do not listen well. The consequences can be costly, especially if constructive feedback is given and then ignored. In some cases, key employees leave the organization, in others the information could have prevented. The problem is that because managers often don’t listen, they lose touch with what is really going on. Finding out what is going on in an environment where communications are dysfunctional is very difficult.
Blind spots can be costly and what can be done?
The problem is that management needs to have good information on business health. All successful businesses, like all high performance sports teams, have access to current and valuable information to enable them to make sound decisions. Where there is systemic of cultural impediments to communication, it may be worthwhile to invest in a business health diagnosis. This will identify the bottlenecks and impediments you face, and also facilitate and capture the opportunities and gains that can be made quite quickly. The Plutus program developed in Scotland and licensed to us has been tried in tested in over 20 countries and has been proven in the market to deliver a positive ROI.
If this sounds interesting, please contact us here >> for an initial conversation without obligation.
John Holland – Plutus Consulting Group