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Why Transparency Supports Healthy Organizational Culture

transparency, organizational culture, small to mid-sized business, business owner, CEOSome of you may know that I host the Twitter chat, #KaizenBiz every Friday (you can read about our more recent conversations here) and often there are interesting lessons or insights that come from the live chat. As someone who coaches business owners and executives to become better leaders, a healthy organizational culture is often a topic or very near the surface.

But what is organizational culture?

For the small to mid-sized companies I work with, culture is often the expression of the business leader. Since small to mid-sized companies are more compact and connected than larger corporations,  it is easier for the business owner/ CEO to express to everyone how he/she wants things to be and, in growth organizations, to become. That means values and behaviours are obvious and the meanings and purposes of these values and behaviours is idiosyncratic to that company. As an example, one of my clients makes it a point to be available for face to face conversations, ask questions  and share a lunch with everyone once a month. Another client in a bigger organization believes in hiring smart people  and he lets them know his expectations and then gets out of the way for the day-to-day execution of these expectations. He is doing what he is good at and, consequently, so are his employees.

Transparency and culture

You may have heard a lot of discussion about transparency in various places. According to the Business Dictionary, transparency is

“Lack of hidden agendas and conditions, accompanied by the availability of full information required for collaboration, cooperation and collective decision-making. [Also as definition] Minimum degree of disclosure to which agreements, dealings, practices, and transactions are open to all for verificaton.”

One would think that smaller organizations would have less machinations and hidden agendas than their larger counterparts but politics are everywhere.

What could possibly go wrong?

Most small companies operate in a clear and legal manner. But there can be some pitfalls or unforeseen consequences when corporate culture stems from the leader as alleged actions by New Jersey Governor Chris Christie and his administration are being reported. Now the temptation is to say that politicians are corrupt anyway but I remember working for a doctor who would lose his temper in such a dramatic fashion and belittle others that people were literally afraid to speak up in meetings. Consequently, this small organization had high turnover, backbiting amongst colleagues and absolutely no faith that your immediate boss would ever back you if you needed it.

But there are other things to consider:

  • Lack of common definition of privacy and discretion: (thank you to Lois Martin for highlighting this) With multiple generations in the workplace, privacy and discretion have morphed over time and it is up to the leader(s) to clearly state what clients and the public can know about the company. This can be also seen as professionalism.
  • We live and work online: There are risks and responsibilities as this McKinsey report discusses. Cybersecurity is an issue for all businesses, regardless of size.
  • People may bring a negative perspective from their previous employer: As you grow, you hire new people and they bring all of their experiences, good and bad, with them. Their stories may color how they share information, show intiative or handle disappointment in your organization.
  • Euphemisms: Transparency depends on people saying what they mean. If you are “demising” jobs, let people know to expect their job may be eliminated.
  • Consistent ethical code: Transparency is really an encapsulation of certain values — respect, integrity, honesty — and if you are cutting corners, your employees will cut corners and this, ultimately,  affects attracting and retaining your customers

When you stop to think about it, it brings up all sorts of questions about organizational culture, individual behaviour choices and the validity of an ethical professional code.

What could go right?

Of course, there is always another side. Part of the most recent discussion about transparency are the advantages it gives to businesses. Small to mid-sized businesses may have been onto this for some time. Quite often you know your customers by name and understand how important that “know, trust and like” factor can be.

  •  Differentiation is clear: While you have much in common with your competitors regarding customer service or even type of product or service you offer, your words and actions, source of materials, vendors and clear wording on policies (without the super fine print) and procedures invites trust.
  • Happier employees: If you have ever worked for a boss who was tough and fair, you worked for a leader who was transparent in his/her expectations.  A 2013 TINYpulse employee satisfaction survey reported that transparent managers had a “correlation coefficient 0.94 with employee happiness.” Good management fosters better morale and productivity.
  • More accurate information about what customers like/dislike: Open, two-way communication with your customers enables better data gathering on what your customers buy from you and what sorts of improvements are most desired.
  • Clear internal communications: When the business owner/CEO takes the time to listen and interact, it becomes clear that the whole organization is supposed to listen and interact.
  • Supports accountability: When the decision-making process engages both the leaders and those assigned to executing the business goals, it is easier to know why a goal was chosen, who will do the work and when it is scheduled to be completed.

Transparency helps you develop a healthier organizational culture

It does take some work and maybe even retraining on your part to become more transparent. On the  other hand, having the ability to know who works for and with you simply provides an excellent foundation for transparency. On that you can build out how the values of honesty, respect, integrity and professionalism will be expressed in your culture.

What reasons do  you believe that transparency is important in a small to mid-sized business?

When could transparency harm your small to mid-sized business?

How much transparency is needed to develop a healthy organizational culture?

 

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SOPA, Innovation and Potential Global Impact

SOPA, Innovation and Potential Global ImpactAcross many social networks and many blogs, you may have noticed a lot of discussion of SOPA. There is a clear explanation on CNNMoney but, in a nutshell,  SOPA (Stop Online Piracy Act) is a bill going through the US Congress that is supposed to eliminate copy infringement and penalize offenders. There are plenty of people out there with rogue web sites who steal innovative and creative products. These rogue websites are located outside of the US but they This threatens not only the competitive edge of the companies who has intellectual property and products stolen. According to a letter to the editor of the New York Times, the US Chamber of Commerce, it “threatens 19 million jobs.”

No one is advocating for online piracy

What is at stake is that the bill is poorly written in its current form. Fortunately this week, support has eroded and perhaps the sponsors of the bill will take the opportunity to improve the language so it actually targets these rogue websites. Artists, musicians, film makers, entrepreneurs and other content creators should have their copyrighted material protected. No question. It just comes back to how the bill is written and can it do what is intended?

Could innovation be stifled?

There have been discussions about how to regulate the Internet. As you know, there is everything on the ‘Net. But one of the things that makes the Internet so attractive is its openness. Now we have so many ways to communicate, collaborate and share with one another new ideas for business. We’re redefining how we interact on a personal and professional level. And this is changing how business is conducted. Not only are companies and partnerships formed but what is truly intriguing is the capacity to the varied ways people can connect to create and produce intellectual property.

Since there are provisions in the bill to shut down sites that are alleged to have violated a copyright. This means that sites would be blocked by ISP’s, be removed from search engines and be denied the ability to collect payment from online payment services (ex. Paypal). It is unclear how a site could defend itself from false accusations. So if a site aggregates information or users interact with one another, there could be an allegation of an infringement or intellectual property or the ability to enable an IP infringement. Result: the site just disappears.

What could happen globally?

It seems to me that a number of small and mid-sized businesses will not only cease to exist. Cloud computing, social media sites and many other advantages that the Internet provides an avenue for these smaller companies to compete, attract and serve their non-US customers with lower costs and easy access.

Non-US businesses may find that there are just too many obstacles to doing business in the US. SOPA could have a chilling effect as there may be fears that it is a form of censorship and potential legal issues.

Want to add your thoughts on how SOPA could positively or negatively affect how business is created and conducted?

Join us on the Twitter chat, #kaizenblog, on Friday, January 20th at 5pm GMT/12pm ET/9am PT. We want to hear what you have to say.

Certainly it’s clear that I have some grave concerns about SOPA in its current form so my bias is negative. The US House and Senate have to create a bill that will be cognizant of what is really going on online, what laws currently provide adequate protections, the types of products and companies that are created and how this could adversely affect how business is conducted. Still online piracy is a problem.

What would you suggest?

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5 Ways to Avoid a Rose-Tinted Strategic Plan

Avoid rose-tinted strategic planReady to close 2011 and prepare for 2012?

It’s likely that you’ve already started thinking about how your small to mid-sized business will perform in 2012. Planning is an act of imagining what could be and letting go of what is. Are you coming to the planning meetings full of confidence or dread? Or maybe somewhere in the middle?

Weirdly, any of these attitudes could create a rose-colored strategic plan.

You know this already but how you see the world influences how you act. That’s why a paradigm shift feels so powerful. The very essence is that you have to change how you act.  Our mindsets create expectations, blindspots and beliefs that color what information we absorb and which we ignore or downplay.

  • Overconfidence leads to oversights or simply blindness to threats or opportunities. “We don’t have to worry about that”
  • Dread leads to analysis paralysis, self-doubt and focus on possible threats. “This has got to work”
  • The balancing act gets skewed by the day-to-day duties and not making time to maintain a global perspective. “If it ain’t broke, don’t fix it”

See through a clear lens with these 5 tips

1. Business analysis. Schedule quarterly reviews including a SWOT analysis so you can take a step back and be more objective about how your business is performing.  With the new year almost upon us, you may have to comply with changes in regulations or other variables that require adaptations. To make this easier, use a PESTEL analysis to more clearly identify potential threats and opportunities. Another possible analysis that will illuminate how your business is functioning within economic turbulence is Ansoff’s Strategic Success Model (check out page 3 for chart).

2. Communicate clearly and often. Make time to speak with your team and/or business partner as a group. This avoids wasting time running from one person to another to give the same message. It means you stop and listen to what they are actually saying. This is  your opportunity to gauge the morale of your organization as well as getting information for the business analyses. Even a 5-15 minute group meeting can be very productive when you keep it focused on 1-2 topics and schedule follow ups when issues need more attention.

3. Mentors, coaches, mastermind groups and/or trusted confidant. No matter the size of your organization, it helps to keep your head clear. As a leader, it is important to have a safe place to sort out your thoughts and feelings. Mentors, coaches, mastermind groups and/or a trusted confidant gives you that space so you can interact with your employees, vendors and customers effectively.

4. Know the difference between “nice-to-have” and “must-haves”. Sometimes strategic plans become wish lists. While taking audacious ideas and setting them as targets is desirable, it is also crucial to keep your “bread-and-butter” targets active. You can use the things that produce a steady revenue stream as a means to invest in your next “nice-to-have”. The tried and true parts of your business are the foundation. Be aware of how much energy and resources are needed for your newest offering so you can plan for them appropriately.

5. Take care of yourself. Thinking and the ability to keep emotions in check deteriorate when we don’t eat healthy foods or get enough sleep. Lack of sleep alone can lower your cognitive abilities. When we feel run down, it’s tempting to go with what makes us feel good. Exercise or just simply moving more is a great way to clear your mind so you can cope better.

Avoid the rose-tinted strategic plan.

The willingness to seek accurate information and use it to create your strategic plan will pay off. It all starts with your desire and commitment to see your business as it truly is.

 What tips would you add?



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