Linh Truong has written an article on her interpretation of the Global State of Operational Excellence Survey Report - Critical Challenges & Future Trends - 2018/2019.  Click here to download the full Survey Report 2018/19.  

The Most Comprehensive Study of Critical Challenges and Future Trends within Operational Excellence

With nearly 1000 respondents, 37 insightful questions, detailed analysis & insights from 40 industry thought leaders, and the BTOES Insights executive team, this 130 page report is recognised as the most comprehensive study of critical challenges and future trends within Operational Excellence, and is considered a key resource for the industry. Areas covered include:

• The Critical Operational Excellence Challenges faced by executives.

• The Current Scope of Operational Excellence.

• How is Operational Excellence success measured?

• Key Findings & Roadblocks.

• What are executives focusing on over the next 12-18 months?

• What have been the greatest developments?

• What are the key drivers pushing change in Operational Excellence?

• Industry Perspectives.

• Small, Medium & Large Corporation Perspectives.

• Detail Analysis & Insights from BTOES Insights Executive Team.

• Detailed Analysis & Insights from 40 Industry Thought Leaders.

• Analysis of key themes, including Cultural Transformation, Customer Delight, Sustaining an Operational Excellence program, Need for end-to-end Business Transformation, Keeping up with new technologies/impact of digitalization and Leadership Buy-in & Understanding.

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Assessing the Corporate Culture

In the words of Peter Drucker, “Culture eats strategy for breakfast”. The role that a company’s culture plays in its success or failure is becoming increasingly clear over the past 20 years. Senior management’s aggressive stance on how much risk they are willing to accept for the sake of growing the top line and the resulting downfall can be seen in headlines starting with Enron to Wells Fargo. The topic of ensuring organizations have a healthy corporate culture are now being added to Board agendas, it becomes imperative for companies to assess their culture against Senior Management’s desired culture. This article will provide stakeholders (Board, management, auditors, etc.) a roadmap to assessing the company’s culture. Click here to read the full Survey Report 2018/19. 

Understanding the corporate culture

Understanding the corporate culture goes beyond just interviewing employees to obtain a cross section of their perspectives and thoughts on the unwritten but understood rules and norms that drive day to day behaviors in the workplace. There are key areas that can be objectively assessed to gauge the level of healthy versus unhealthy traits of an organizations’ culture. These key areas include:

• Organizational Mission / Values / Strategy / Objectives

• Organizational Structure

• Compensation / Incentives

• Risk Management

• Company Policies

• Board Reporting

• External Feedback

Organizational Mission / Values / Strategy / Objectives

Embedded throughout the organization’s mission/value statement as well as their strategic goals and objectives should be how the company plans to achieve their mission and goals. If there is no mention of the manner in which they achieve their goals, then the lack of commitment to how things get done may suggest that management does not care how employees get there. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

Organizational Structure

The title and authority of certain key roles provide insight into how important these roles are within the organization. Roles that have responsibility for compliance (CFO, Compliance, Quality, Audit, Information Security, etc.) should have a level of authority that allows them to be leaders in driving policies and have seats at the table rather than just task takers who merely follow instructions from the business.

Compensation / Incentives

People will behave exactly the way organizations pay them to behave. If an employees’ livelihood is tie to opening as many accounts as possible (rather than the quality of the sales), then that is what the employees will do. Compensation should not only be defined by growth or volume of sales, but must also be aligned to how the sales are achieved (ethically, safely, within laws/regulations, etc.). If there is not a component of performing ethically build within the company’s compensation structure, then you are basically allowing the employees to determine how they achieve their numbers.

Risk Management

Whether an organization has a robust risk management program in place can say a lot about whether a company is focused on identifying, mitigating and managing their risks. As a part of this exercise, management should also determine their risk appetite – what level of risk are they willing to accept? Is the company risk averse? Are they thoughtful about taking risks? A lack of an enterprise risk management process in place would be a red flag.

Company Policies

What type of policies exist at the company? More importantly, how are policies developed, communicated, implemented and enforced? If companies do not provide employees with guidance on Code of Conduct, Conflict of Interest, Anti-corruption, Gifts, Procurement and other policies that stem potential bad behavior, then that sends the message to the employees that the company does not have a stance on these topics so they should use their own judgement which may not align with the company’s risk tolerance.

Board Reporting

What topics are being presented to the Board each quarter? What is management choosing to report to the Board and how much detail is provided? Do the compliance related functions (Chief Audit Executive, Chief Compliance Officer, Chief Information Security Officer, etc.) have a reporting line to the Board or, at a minimum, have an opportunity to present to the Board?

Internal/External Feedback

What are employees saying in their Employee Engagement Survey? More importantly, is management taking any action to address the low scoring areas? What are ex-employees saying about the company on Glassdoor? What are external auditors, consultants and recruiters saying about the company? Interviewing employees across all functions and at all levels will provide insight into the Tone at the Top, Mood at the Middle and Buzz at the Bottom.

Review

Reviewing the above areas will certainly provide the temperature of the organization and determine how closely aligned the actual culture is compared to the desired culture that management would like to accomplish. Once the gaps are identified, management should identify what the root cause of the misalignments are and how to move the organization’s collective workforce towards a healthier direction that will not only achieve the company’s strategic objectives but will get there in the manner that is within management’s risk tolerance level and ethical boundaries. As history has painfully demonstrated repeatedly, an organization may achieve short term goals for a period of time without  the right culture, but will eventually fail in the long term.