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Climate and Performance

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In an increasingly competitive  trading environment, there are compelling reasons to improve organisational performance.  Typical targets for improvement programs are production quantity and quality, innovation, and creativity.  But how do you do all that?  We know that getting the entire organisational membership behind the performance push is important, but how do you create a climate that motivates people to think about how they can improve themselves and what they do for the organisation’s goals?

Organisational Change
What’s been tried

It would seem bold to suggest that any one simple process, or change of process, could impact favourably on profit, employee turnover, EAP usage, sick days, absenteeism, commitment, innovation, creativity, performance and ultimately on share price, organisational esteem, executive kudos and so on.  In fact, it’s not such a big ask.  It’s just that we are more familiar with narrowly focused fads and management programs, recognised by their three letter acronyms like MBO, JIT, QFD, CAT, TQC, QWL, TQP, CAM, SPC, VAM, MAP, TQM, MRP, CRM and BPR, and probably others.  Research into their frequently poor ROI shows that they are usually applied in chunks and phases, and usually fail because they are introduced more as a way to improve efficiency than to spread strategic conversation focused on missions and visions.

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NOTE:  Deltapoint offers services to help define and implement strategic climate planning

"Employees have learned to distrust change programs."

A major common flaw is that they are inflicted and directed from the 'top down', but the additional effort required in execution is experienced bottom-up.  In focusing on organisational economic / performance benefits, the plans ignore the very people who are required to make it work from the bottom up - the employees.  Too little attention is paid to involving, motivating and inspiring people.  The non-executive members see only what they risk losing - security, livelihood, opportunity, job satisfaction.  To them changes mean more job losses, more work, longer hours, and more responsibility for the same or less money.  In a response learned because nothing good for employees has ever happened following change, trust towards the organisation's executive level usually suffers.

A missing ingredient - 'what's in it for me'

The typical management program focuses on what’s in it for the organisation, or the customer, or the shareholder.  Such tunnel vision ignores the impact on the other stakeholder areas, especially employees.  It is equally ineffective to emphasise the employees, and pander to their comfort wishes in the hope that it will translate into commitment and performance. 

Instead, we can learn from what we know about the psychology of motivation, and from successful change projects.  We do know that most employees want to be valued, want to be proud to work 'here', want to contribute, want to look good and be appreciated, and want appropriate rewards for organisational gains from their contributions.  People want to work, and will work hard even in harsh environments when they know why, and believe in why.  Humans flourish in a fair and just relationship of give and take.  It is rarely a money issue that triggers people to quit or under-perform – but dissatisfaction about ‘what it’s like to work here’.

To maintain high levels of commitment, innovation, creativity and performance, organisations should therefore expect to facilitate development of an organisational climate that is conducive to the desired behaviour.  Unfortunately, organisational climate is currently an accident of everything the organisation is and does.  How often does an executive member include the question 'what will this plan do to our climate?', or use a phrase something like ‘here’s the climate impact study’?  A deeper and strategic question would be 'If this plan is so important to us, what sort of climate will carry it through?'.   Climate is not merely important, but strategically so.  So, instead of ignoring it and letting it be an accident, how do we design, implement and maintain a suitable climate?  And then how do we learn to improve those abilities to design, implement and maintain climate?

Why is climate important?

Organisational climate is essentially about ‘what it’s like to work here’.  True to the climate metaphor, organisational climate is primarily about the perceptions of the climate rather than its absolute measures.  While temperature is an important measure of geographic climate, it is not the temperature that is of interest, but our perception of it.  What may be too cool for me may be too warm for you.

To facilitate measurement and manipulation of organisational climate, researchers have dissected it’s characteristics and perceptions into categories such as the nature of interpersonal relationships, the nature of the hierarchy, the nature of work, and the focus of support and rewards.  It is through those characteristics and perceptions that climate has a bi-directional relationship with everything the organisation is and does -  it effects everything, and is effected by everything.  For example:

  • Organisational literature describes climates of crisis, trust, cooperation, calm, trust, distrust, entrepreneurialism, innovation, fear, respect, collective learning, openness and so on. 
  • Climates are also described as political, supportive, creative, strong, etc. 
  • For each climate there is an opposite: climate of calm vs crisis, and trust vs distrust etc.
  • Climate relates strongly to performance measures.

Climate system is already there

An important point to recognise is that your organisation’s climate system already exists – it’s just that it is probably running amok.  The relationships are already there between performance and leadership, support, communication, profit and so on.  It makes sense to learn how to use it.  A poor climate will effectively sabotage any other development effort.

Learning to design organisational climate

For more information, go to Strategic Climate Planning

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