Long Term Success Through Deep Organizational Diagnosis

Are companies at the competitive edge problem free? Do any organizations work flawlessly? Not in the real world. How do the winners overcome their problems? What distinguishes them from other companies? How do they survive while others flounder or fall?

Like other organizations, winning companies often reach for easy-answers and quick fixes. But if these short-cut responses miss their mark, winners keep searching for solid solutions. They bore more deeply into the situation, ultimately uncovering the root cause.

Return on insight

Top performers distinguish themselves by the way they tackle organizational problems. These masters of organizational detective work unearth fundamental causes beneath surface problems. We call this process Deep Organizational Diagnosis.

Root causes are not easily exposed. Insight is not readily gained. Significant time and effort are required to trace problems to their origin. Winners make that commitment without hesitation. Why? In order to achieve enduring success by creatively turning their problems into opportunities.

A case in point

Lets look at a company experiencing poor sales performance, When the 'pain' reaches a level that the CEO can no longer tolerate, she demands action, now!.

The cause of the problem appears to be waning motivation, and SOS's management team makes the reasonable assumption that they can reenergize the sales staff by redesigning their incentive compensation plan. The company's "do it now" philosophy prompts immediate action. The plan is designed, developed and implemented within days.

Months pass, sales increase insignificantly, and the underlying problems go undetected.

With the 'pain' persisting, the Sales VP calls for a deeper examination of the situation. Sales representatives and supervisors are interviewed; they report that SOS's customers view the product line as competitively inferior, and complain that the technical service department is failing to meet their expectations.

Attention is now focused on product engineering, manufacturing and technical service. A joint meeting with the leaders of these departments points to numerous problems in staffing, training, innovation, responsiveness, and quality control.

As top management continues its exploration, deep-seated issues begin to surface.

They learn that:

  • there is little meaningful communication between sales, product engineering, manufacturing and support services,
  • a long-standing friction prevents genuine teamwork between these departments, and
  • bureaucratic and cultural barriers are clogging the flow of communication to and from middle-managers and first-line supervisors. Deep distrust has shaped the organization into functional clusters that think and act like separate, warring tribes.

Leadership has hit pay-dirt. With persistence, courage, skill and time SOS has faced up to its internal weaknesses. Executive teamwork, communications, systems design, and culture are now on the table as root-cause issues. Through Deep Organizational Analysis, management has opened opportunities for creative thinking that will carry the organization leagues beyond putting out fires. It has ignited the torch of insight that will light its way to the competitive edge.

Barriers to success

If Deep Organizational Diagnosis is so vital to organizational success, why are so many companies mired in the muck of surface issues? We've identified six reasons:

  1. Impatience

    "Get on with it!" "Make it happen!" "Just do it!" "We need answers fast!" "That's just analysis paralysis!" Sound familiar?

    This fire-ready-aim thinking is pervasive and strong. The message is clear: quick action leads to quick results—and often translates to individual rewards. Bucking the do-it-fast mindset by urging deep analysis is swiftly silenced. Our instant-action-satisfaction culture demands rapid results. So we continue to leap to questionable conclusions, have knee-jerk reactions, seize shortcuts, and take half measures.

  2. Simplicity

    The desire to keep things simple is visceral. We instinctively embrace simple solutions. This can be a good thing. In geometry, the shortest distance between two points is a straight line. But Deep Organizational Diagnosis doesn't follow a straight line to the 'bottom line' root cause. Management must traverse a path less taken, crossing and sometimes re-crossing uncharted terrain until it hits pay dirt.

  3. Fear

    Digging for root causes arouses defensive thinking and behavior in most organizations. People fear discovering that a problem can be traced to them or someone they like. They are also haunted by the thought that in-depth exploration will point to actions taken by those in positions of higher organizational power.

    These fears lead to the rationalization: "We don't have time for a lot of questions; just give us some answers." Conveniently, this response dovetails with the 'let's get things done pronto' environment of most organizations.

  4. Lack of Skill

    Deep Organizational Diagnosis is far from simple. Diagnostic skills are seldom taught. It is a rare organization that enables people to learn these skills on the job or take the time to apply them. On the contrary, employees typically acquire a shoot-from-the-hip mentality. Companies reward these employees for responding quickly, not for taking time to diagnose the situation.

    These circumstances bode ill for effectively addressing organizational problems. Even if people are motivated to get to the bottom of matters, they lack the skills to do so.

  5. Vertical Perspective

    Root causes are often complex, spanning multiple functional, geographic, hierarchical, and other organizational boundaries. Finding and analyzing such cross-boundary issues requires an ability to

    1. see the organization as a macro-system and
    2. think beyond single functions or specializations.

    This type of lateral thinking is unlikely in organizations that are compartmentalized into silos where knowledge and perspectives are vertical.

  6. Hypercompetitive Pressures

    In a hypercompetitive, "only the paranoid survive," environment—with an exponentially accelerating pace of innovation and competition—time appears to move faster. Tick-tock gives way to point-and-click in a competitive tempo that we call cybertime. The tyranny of speed is evident in today's laser-like focus on time-to-market and being a 'first mover.' It is reflected in such book titles as: Business @ the Speed of Thought, Beep! Beep!, Clockspeed, and Fast Forward.

    Adding hypercompetitive economic pressures to impatience, the lure of simplicity, fear, lack of skills, and a silo mentality, slams the door on any chance for Deep Organizational Diagnosis.

The paradox

The information technology revolution and hypercompetition have two profound effects:

  • The number and complexity of organizational issues are increasing.
  • The time available to consider and understand organizational issues is decreasing.

These two effects create an untenable bind for management.

Some companies walk around the paradox by concentrating on just one effect: time pressures. With every minute at a premium but pressured to fix the obvious problem, leaders bypass diagnosis and grab for off-the-shelf solutions and guru-hyped fads.

These silver bullets usually lose their luster. According to some management surveys, such remedies as total quality management, reengineering, downsizing, employee empowerment, de-jobbing, and culture change fail to meet management's expectations. Eventually, one "expert" or another lambastes these ideas in print and from the podium, usually as a segue to championing a "newer, better" concept.

But the failure to realize expected outcomes is not necessarily because the concept is flawed. The weakness more often lies in:

  • the way the company implemented the program,
  • the impatience of the company to stick with the program long enough for it to yield results, and
  • unrealistic expectations on the part of the company.

The more common reason for failure is that companies mistake surface, secondary causes of pain for underlying, primary causes. When companies recklessly aim silver bullets at bogus targets, they woefully waste good ammunition.

Breaking the paradox

Management is squeezed by the jaws of an ever-tightening vice. Caught between relentless market forces one side, and increasing organizational complexities on the other, they ever more pressed to find a way out. We offer the following ten-step escape strategy:

  1. Understand the Paradox

    Get managers to see the squeeze they are in; how they are ensnared into having less time to deal with increasingly complex organizational issues that demand more time. The first step in liberating leaders from the paradox is coming to grips with it.

  2. See the ROI in Time Invested Probing Problems

    Show that time invested in getting to the root-causes of organizational issues before taking action saves time and effort in the long run, and is the key to creating a more successful organization. Explain how gut reactions waste opportunities, squander resources, and allow root-causes to increasingly diminish profitability.

  3. Spotlight the Creative Potential

    In hypercompetitive markets, only strong organizations prevail. To create a strong organization, root causes must be attacked. The requisite diagnostic process gets creative juices flowing, leading to innovative ideas for achieving higher performance. Organizational insight generates knowledge and out-of-the-box thinking that moves beyond problem solving toward the more ambitious goal of organizational growth and strategic strength. Deep Organizational Diagnosis' hidden knowledge- and growth-creating potential dispels the paradox.

  4. Allocate Time for Organizational Issues and Planning

    Coach managers to see the vital value of dedicating time to organizational issues. Hypercompetitive pressures easily capture the mindshare of leaders, taking attention away from organizational problem solving and planning, and the discovery of opportunities for advancing the company's competitive prowess. In addition to addressing hot organizational issues when they arise, encourage managers to block out time each week or month to find new ways to optimize the full potential of their organization.

  5. Provide Insight into the Organization as a System

    Tracking down root-causes of problems calls for an understanding of how an organization works as a system. Train and mentor managers to understand the way your organization operates as a system and the complex network of connections that constitute how it acts and reacts to its environment. Issuing copies of your organization chart won't cut it. Your managers must fully grock the gestalt of your organization: its systems, processes, and formal and informal relationships.

  6. Distinguish Between Smoke, Fire and Flint

    Teach your employees to recognize the difference between symptoms, causes, and root-causes. Incorporate this into their development program. Encourage them to ask "Why?" just as they did in their formative years, before that behavior was silenced. Work to undo a lifetime habit of keeping a low profile.

  7. Arm Managers with Diagnostic Tools

    Teach managers to use multiple analytical methods to diagnose and solve problems. Train them in the art of asking questions, conducting non-threatening interviews, and facilitating focus groups. Provide them with the know-how to use analytical cause-and-effect techniques to get at the core of issues to more effectively plan and take action.

  8. Encourage Creativity

    Stimulate your managers' creativity. Challenge them to infuse the process of deep organizational diagnosis with an imaginative spirit. Inspire them to think out-of-the box, to find innovative solutions, and to envision organizational transformation.

  9. Motivate

    Do not punish managers for taking the necessary time to work through issues and untangle knotty situations. Evaluate and reward them for successfully solving underlying issues and advancing organizational effectiveness.

  10. Internalize

    Deep Organizational Diagnosis isn't a one-shot deal. The key to its creative and value-generating power is realized only when management incorporates it in its fundamental thinking processes. Such internalization takes time and perseverance, since it runs counter to overwhelming forces that pressure management to act first and contemplate later. Moreover, internalization of Deep Organizational Diagnosis achieves continuous organizational improvement and enables transformational leaps.

The Bottom Line

It takes time and perseverance to change ingrained habits of confusing symptoms with underlying problems, leaping to unfounded conclusions, and shooting from the hip. But this investment nets huge returns. Managers who are skilled organizational sleuths, able to zero-in on the real culprits, and capable of turning problems into creative opportunities for gaining organizational strength, comprise an intangible force of incalculable worth.