What’s the risk?

With new projects comes an expectation of improvement. But what does not always come with new projects is a risk assessment. And without a risk assessment, successful implementation of the project is in jeopardy right out of the gate. 

When embarking on efficiency improvements in your organization's processes, there are six risk levels to consider. They are:

1. Measures of performance. If your company lives and dies by its annual budgets, where departments do anything it takes to spend every last allotted penny in the annual pot (for fear they won't get the same amount next year), you are at high risk of failing to implement projects successfully. 

2. Management hierarchy. A company that has three or more layers of management is also at high risk of failure to implement efficient measures. The more layers, the higher the risk.

3. Competition. While a niche in the market may seem like a good idea at first, companies that have their patents all locked up and work secured for the next several years are at high risk of losing it all. If you don't have competition, you're not growing or improving.

4. Average tenure of employees. Companies with decades-long tenured employees tend to do things the same way all the time. These companies are generally afraid of and resistant to change.

5. Communications. If your company tends to communicate on a "need-to-know" basis, you probably need to know that your company does not (or will not) listen to its employees. Any suggestions for improving efficiency will probably fall on deaf executive ears.

6. Middle management. Companies that frequently select their supervisors and middle managers as they "come up through the ranks" are doing it wrong. If your employees have never worked anywhere else and you are rewarding them with more senior positions, you are doing yourself (and them) a disservice. Change is difficult to implement if management is heavily invested in maintaining the status quo.

Of the above, pay attention to the two top "red flags" that will prevent change in your organization. They are: (1) average tenure of your employees is greater than four years; and (2) more than 25 percent of your middle management has been promoted based on seniority and years of service ("moved up through the ranks"). 

If your organization suffers from any of the above, implementing efficiency improvements right now may not be the best move, since you have many barriers to overcome. 

As a leader or executive, you need to understand these barriers and develop countermeasures to enable successful project implementation BEFORE beginning implementation.

Overcoming barriers to implementation

Overcoming barriers to implementation requires executive to not only understand human nature and change, but to understand how to free the organization to enable its success. 

Consider the following countermeasures to help you overcome barriers that may stand in your way of successful project implementation.

1. Adopt activity-based accounting over traditional accounting methods. Everyone in the company should be able to understand your measures. When people understand what is being measured and how to apply the measures, they will invest their personal accountability to ensure results.

2. Introduce a flat hierarchy into your organization with no more than three levels. The adage "less is more" cannot be more true in this instance.

3. Encourage competition in volatile markets. It is through competition that growth, efficiency, and success ensue. If you have no competition, you have no reason to grow.

4. Move your employees around at least every two-to-three years, so that they gain experience in many facets of the business. Ideally, hiring externally for new or vacant positions will help broaden the organization's overall perspectives about business. It will also help improve your organization's efficiency and productivity.

5. Encourage a culture with effective two-way communication at all levels. Use many forms of communication such as regular staff meetings, daily work group meetings, newsletters, communication boards, e-mail, and other forums.

6. Select your supervisors and middle managers based on their well-rounded background and experience working in other companies, other divisions, and other functions. Stop moving employees into senior positions as a reward for long service.

If your company can do the above, you will have few, if any, barriers standing in your way of successfully implementing efficiency improvements in your organization.