Knowing When It Is Time to Make An Internal Shift

Is your organization ready? How to know when it’s time to make an internal shift

Change management. It’s a phrase that saturates the working world, especially as companies prepare to make an internal shift to operate more efficiently and become more profitable. Having solid change management practices in place can streamline these internal shifts and make them more lasting. Clearly, preparing an organization for an internal shift at the right time is critical to a business’ success, but how do you know when it’s time to re-align your organization?

High labor turnover and increasing re-work rates are just a couple of the major indicators that your business needs to align internally. When employees are less engaged in their work or when they’re feeling overworked or stressed, it’s a sign that you need to make a change within the business as soon as possible. It points to changes not just relating to human resources and organizational development but also processes, systems, and capital equipment utilization.

However, there are more than 20 different aspects of a business to determine what the organization needs to make an internal shift and how they might best do that. We’ve provided a partial list below.
Metric Indicators It’s Time to Make a Change.

For some indicators, you can specifically analyze whether certain rates, such as labor turnover or absenteeism, have increased and by how much. Analyzing these metrics gives you a clear picture as to when things started going downhill and helps you pinpoint why.

● High labor turnover. If employees aren’t sticking around, you need to determine why.
● Diminishing or stagnating efficiencies. If your business is becoming less efficient, it suggests there’s a third factor that’s inhibiting your employees’ ability to do their jobs well.
● High or increasing re-work rates. This metric also suggests that employees are less focused on the work they’re completing and/or the business’ processes, systems, and capital equipment do not adequately support them.
● Increasing absenteeism and tardiness. If employees not showing up to work on time (or not showing up at all) becomes the trend, it’s important to figure out what’s going on. Other signs of absenteeism include leaving early or taking longer-than-necessary lunchtimes.
● Rapid growth in the organization, including sales numbers, employees, or a territory expansion. Even if this growth is positive, you need to make sure that your team and your internal structures can bear the weight of the growth. Be cautiously elated.
● Not meeting initial project deadlines or running over budget… chronically. Every team has a project that goes over budget or that misses a deadline on occasion simply because unforeseen situations arise. But if this is a repeated issue, it shows that you could probably enhance your business’ processes and systems.
● Declining, stagnating, or lack of customer service ratings. Whether customers are rating your business on Google+, Facebook, or on some other platform, poor customer service ratings are never a good sign.
● Plateauing (or worse, declining) gross sales and net income values. If your business’ sales begin declining, it’s time to investigate what factors are contributing to those losses.
● Excessive overtime or paid-out PTO. If your employees are working a lot or not taking all their vacation, it’s a sign that the processes and systems you have in your business are not fully effective. Over time, your employees will probably feel overworked and stressed, and be less engaged in their work.

Subjective Indicators It’s Time to Re-Align

In addition to the metrics above that your organization can easily analyze, there are several less quantifiable signs that indicate when a company needs to shift internally.

● Peter principled people. If your organization promotes people solely based on seniority (not based on skill or aptitude) and has a number of people in leadership or manager positions who are not competent, this is a sign that your organizational development could use some help. The goal of a successful company is to make sure that people are competent in their positions, and that often includes ongoing professional development and continuing education.
● IT and IS that does not support the company culture. Ideally, everything in your organization supports your desired culture, including the information technology and systems that your business utilizes. For example, if you want to build a team-driven company culture, consider investing in some project management software and perhaps an intracompany tool like Slack. Look to innovation that helps promote the desired culture of the organization.
● Micromanaging among leaders. If leaders in the organization are micromanaging others, it suggests two things. First, your leaders don’t have enough tasks on their own plates, and two, that they don’t adequately trust their employees. In both cases, it’s evident that it’s time to improve team communication and managerial processes.
● Poor conflict resolution. If your employees and leaders are struggling to resolve conflict effectively, this can affect how quickly processes get updated and also set a poor tone for other areas of communication within the company.
● Rationalizing the bad hire (and exit). If your organization has a habit of overly justifying or overly rationalizing why someone was fired or why someone left the company, it’s a both a sign and a missed learning opportunity. Often, these “one-off” situations can become trends if your business doesn’t take the time to dig into why these people were hired and/or fired or why they quit. If the organization seems to blame the ex-employee for everything wrong after their departure, then that is a sign of problems as well.
● General lack of team projects. If your business has very few projects that require team input and collaboration, then your employees aren’t building and practicing key skills that will empower the business to flourish. Also, since projects are often multifaceted, it suggests that your employees may not be spending as much time in their areas of expertise (see below), which will cost the business money in the long run.
● Lack of SOPs and processes and systems. If your business lacks standard operating procedures and processes and systems especially for critical and profit-center activities, odds are that you’re spending more time on things than you need to.
● An atmosphere of entitlement. According to Contracted Leadership, an atmosphere of entitlement is the exact opposite of having an ethos in the company that is focused on hard work. If some of your employees feel entitled, you may encounter that these individuals are less inclined to give their best effort and contribute to the company as well as they are able, which, in the long-term, costs the business money.
● Goals and objectives that do not support both the organization and the person. People are most passionate about work when their goals at work, the goals that are being set for them match the goals that they want to have. For example, if one of your senior manufacturing workers wants to be a team lead and onboard new employees and has no desire to be working in upper management, support his goals rather than forcing him into a leadership position that doesn’t fit his goals and interests. The idea that a person’s career follows a staircase model to the C-suite is so 1989.
● Employees spending less than 25% of their time in their area of expertise. If a business’ employees are spending very little of their work hours in areas where they excel, there’s a problem. Naturally, people are most efficient at things they’ve done numerous times, especially if it’s something they enjoy doing, but this does not mean that activity is their area of expertise. Do your best to make sure that your employees are spending at least 50% of their time in places where they excel so that they can make the greatest impact on your bottom line.
● Upcoming market or industry changes that will require a different internal structure. Do you know that your industry will have new policies or new best practices? Make sure you accommodate them and help your organization shift internally to be ready. Depending on the scope of the market and industry changes, this might be a small change or a huge transformation within your organization.

This sounds a lot like our organization. How do I bring an internal alignment agent on board?

After you’ve evaluated how your organization is performing against these metrics, then next step is to ensure everyone among executive leadership is on-board with making a significant change in the company. If there’s any dissent about whether this change is necessary, then it’s not yet time to bring in someone who can change your organization; it’s time to foster buy-in among leaders and upper management.

This may mean that you have to do a bit more analysis and evaluate a few more metrics first. If you haven’t provided other leaders enough concrete evidence that the company isn’t internally aligned and that change needs to happen now, it’s hard to get buy-in. But if upper management can clearly see that six months ago their company-wide absenteeism increased by 200%, which coincided with a particular event or internal policy, someone will sit up and listen.

Regardless, if you do bring someone onboard, make sure it’s a good fit. Various change management agents offer different services and different perspectives. Some will function more as consultants, providing a rough overview and biweekly meetings, and others, like Contracted Leadership, will be much more engaged and active in the internal alignment process. Different approaches work for different companies, so be sure to find the right partner for you.

To learn more about whether or not your organization is in alignment, or to learn more about Contracted Leadership and schedule a free initial consultation, please visit www.contractedleadership.com.

Author: Bruce Holoubek

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