Battle the Economic Chaos with a Healthy Organizational Climate by Richard Magid, SoundBoard Consulting Group LLC

In the business that I own, I am fortunate everyday to have the opportunity to work with business owners, executives and leaders from a broad cross-section of industries. Up until about October 2008, there continued to be a sense of optimism and confidence that businesses would survive and even prosper in, what was becoming, a soft economy. 

Then there was this massive drop off the cliff that we all experienced…FEAR, PANIC and a SURVIVAL mentality quickly set in.

We IMMEDIATELY became short-sighted – we only became concerned about getting thru today – we forgot about the bigger picture and many of the fundamentals of Superior Leadership.

Superior Leadership is something that significantly impacts your business, in fact, it is very fundamental, but something that we tend to forget especially in environments like the current chaotic one.

As Superior leaders our primary responsibility is to create and sustain a healthy organizational climate …most studies have shown that a healthy organizational climate can impact employee productivity and bottom line profits by up to 30%....in addition, 70% of this variance is rooted in leadership performance. 

So, what is Organizational Climate?  Simply, the atmosphere of the workplace…How does it feel to work here? 

Do you know what the climate of your organization is?  Do you know the difference between your perception and that of your direct reports?

A healthy organizational climate creates what we call “Discretionary Effort”.

When our people work well beyond “Compliance” (doing what a job description tells them to do – the tasks) and achieving full potential – tapping into and leveraging their greatest strengths and years of experiences. We all know when we see it from our staff - it is the difference between mediocrity and excellence!

What are some examples of Discretionary Effort?

·         It can be as basic as, coming prepared to meetings with new ideas

·         Taking that extra effort TODAY to satisfy a client (extreme customer service).

·         Thinking out of the box.

·         Not accepting NO for an answer!

·         Being consistent…there’s a novel idea!

·         Staying accountable – doing what you say you are going to do by the time that you agreed to.

A healthy organizational climate fosters discretionary effort!  Remember:  Discretionary effort impacts bottom line results up to 30% and we as leaders control 70% of that impact!

So, let’s look at the six components of organizational climate and what you as leaders have control over and need to do to make sure that no matter what the economic conditions…that you are fostering a healthy climate for your direct reports. 

1. Clarity – Communication and Expectations… The feeling that everyone knows what is expected of them and how their goals relate to the larger organizational objectives.
2. Standards – Performance and Goals…It is the emphasis placed on improving performance and doing one’s best…challenging but attainable goals. 
3. Flexibility – Constraints and Innovation…It’s the feeling that employees are not being handcuffed by constraints in the workplace…unnecessary rules, policies, procedures, etc…and that new and innovative ideas are readily accepted.
4. Rewards – Recognition and Incentives… It’s the degree to which employees feel that they are being recognized and rewarded for great work…monetary and non-monetary (informal feedback – good job, thanks, etc…)
5. Responsibility – Delegation and Trust…It’s the feeling that employees have enough authority being delegated to them…people are being trusted and held accountable.
6. Team Commitment – Loyalty and Support…It is the feeling that people are proud to belong to the organization and trust that everyone is working towards a common objective.

Again, it is the leader’s primary responsibility to create and sustain a healthy organizational climate and in these difficult economic times it is even harder, but also more important!

What should you be doing right now to get that 70% impact that is related to leadership performance?

Ask yourself these questions:

1)     CLARITY:  Are you projecting confidence, optimism and presenting a clear vision? Make sure that they know that you see a future!

a.     Are you sure that your people know the company’s mission and direction?

b.     Do they know their department’s objectives?

                                                               i.      Short-term and long-term

c.     Do they know their own goals and how they contribute to the company’s objectives?  Are they able to translate those goals into daily action items? ASK THEM!!!

2)     STANDARDS:  Are you accepting MEDIOCRITY anywhere in your company? 

a.     People will tend to perform to the level of the lowest common denominator…minimum standards are not acceptable!

b.     Are you encouraging challenging goals?

c.     Are you holding your people to the commitments that they make?

3)     FLEXIBILITY:  Are you listening at a higher level to the thoughts and ideas of your people?  What are they not communicating about any constraints that they are experiencing? You need to tap into your emotional intelligence…be more empathetic…a heightened sensitivity to what they are experiencing.  Their thoughts and their feelings.

a.     Are your people being given the opportunity to INNOVATE?

b.     Are you giving them the tools/forums to think out of the box? ASK THEM!

4)     REWARDS:  Are your incentives clearly tied to the quality of performance?

a.     Are your Key Performance Indicators clear? Are they the right ones in this environment?

b.     Are you making sure that your people are being recognized?

c.     Informal feedback is critical in these times…we need to make people feel part of the solution and not the cause of the problems!

d.     Are you celebrating your successes?

5)     RESPONSIBILITIES:  Are you making your expectations CRYSTAL CLEAR? 

a.     Given the times, have responsibilities been changed/added but not documented? 

b.     Do your people have the skills needed to perform their newly acquired tasks at the highest level?  You must continue to invest in training, especially for your high potentials!

c.     Are you increasing the level of accountability?

d.     Do you still believe in your people?

6)     TEAM COMMITMENT:

a.     Are you resolving conflicts quickly? There is no room for infighting! 

                      There are enough outside challenges!

b.     What are you doing to encourage interaction among team members?

Yes, there are so many things working against us in these difficult times, but there are still plenty of things in our control…

Even with fewer resources, tighter margins, and little optimism in the world at large; as leaders we still have the ability to impact bottom line results by sustaining a healthy organizational climate.

• BE BRUTALLY HONEST about the challenges, but continuously share your vision of the future!
• Make sure you REWARD the “A” Players and continue to train your high potentials
• LISTEN to your people ….it is the time to expect returns from your investments in them over the years.

The  weight on your backs is heavier than ever…let’s not forget the fundamentals and be the Superior Leader that you are!

Tough times shape better leaders!