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Welcome To The Denison Consulting Certification Workshop. Dan Denison Chairman & Founder, Denison Consulting ddenison@denisonculture.com. Dave Croci Director of Client Management, Denison Consulting dcroci@denisonculture.com. Your Facilitators. Bryan Adkins CEO, Denison Consulting

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Presentation Transcript
your facilitators

Dan Denison

Chairman & Founder, Denison Consulting

ddenison@denisonculture.com

Dave Croci

Director of Client Management, Denison Consulting

dcroci@denisonculture.com

Your Facilitators

Bryan Adkins

CEO, Denison Consulting

badkins@denisonculture.com

Stevie Collini

Client Account Manager, Denison Consulting

scolinni@denisonculture.com

Lindsey Kotrba

President, Denison Consulting

lkotrba@denisonculture.com

Ari Black

Business Development Manager, Denison Consulting

ablack@denisonculture.com

mindset is the foundation
Mindset is the Foundation

Norms, Behaviors

and Artifacts.

Visible, tangible.

Personal Values

and Attitudes.

Less visible, but

can be talked about.

Cultural Values

and Assumptions.

Usually not visible at all, often held subconsciously, rarely (if ever) questioned in everyday life.

Image by R.A. Clevenger

culture reflects the lessons learned over time

0

Culture Reflects the Lessons Learned Over Time

Visible Symbols

Culture

Lessons

Survival

Underlying Principles

Image by R.A. Clevenger

http://www.youtube.com/watch?v=6_WAmt3cMdk

rituals habits routines
Rituals, Habits, & Routines

Wemust  make  automatic  and habitual  ... as many useful actions as we can.

The more of the details of our daily life we can hand over to the effortless custody of automation, the more our higher powers of mind will be set free for their proper work.

William James

hold your horses
Hold Your Horses!

Morrison’s essay opens with a story of a young time & motion expert trying to find a way to speed up artillery crews during WWI, just after the fall of France. He watched one of the five- man gun crews practicing in the field with their guns mounted on trailers, towed behind their trucks. Puzzled by certain aspects of their procedures, he took some slow-motion pictures of the soldiers performing the loading, aiming, and firing routines.

When he ran these pictures over once or twice, he noticed something that appeared odd to him. A moment before the firing, two members of the gun crew ceased all activity and came to attention for a three-second interval extending throughout the discharge of the gun.

Since this seemed like quite a waste of time, and the young time & motion expert really couldn’t  make any sense of it, he asked an old artillery colonel to look at the films to see if he could explain this strange behavior.

The colonel, too, was puzzled. He asked to see the pictures again. "Ah," he said when the performance was over, "I have it. They are holding the horses.”

Elting Morrison, Gunfire at Sea

paul o neill at alcoa identifying keystone habits
Paul O’Neill at Alcoa:Identifying Keystone Habits
  • It got so bad they would bring dummies to the parking lots, dress them like managers, and burn them in effigy. “Alcoa was not a happy family. It was like the Charles Manson family, but with the addition of molten metal.”
  • O’Neill picked safety as one thing that unions and executives could agree on. Zero injuries. Injuries must be reported to the CEO within 24 hours.
  • “We killed this man. It’s my failure of leadership. I caused his death. And it is the failure of all of you in the chain of command.”
  • Once you see everything as a bunch of habits, it’s like someone gave you a flashlight and a crowbar and you can get to work.
slide13

What Counts…

MissionDirection, Purpose, & Blueprint

Adaptability Pattern, Trends, & Market

Translating the demands of the business environment into action

“Are we listening

to the marketplace?”

Defining a meaningful

long-term direction

for the Company

“Do we know where

we are going?”

InvolvementCommitment, Ownership, & Responsibility

ConsistencySystems, Structures, & Processes

Building human capability, ownership, and responsibility

“Are our people aligned and engaged?”

Defining the values

& systems that are the basis of a strong culture

“Does our system create leverage?”

slide14

MISSION

Creating Shared Vision: creating a clear and compelling vision of a future state

Defining Strategic Direction & Intent: understanding, developing and executing strategy

Defining Goals & Objectives: setting clear goals and tracking progress against those goals

slide15

INVOLVEMENT

Developing Organizational Capability:

developing employees to meet current and future organizational needs

Building Team Orientation:

developing successful, effective teams

Empowering People:

sharing information and communicating so that employees have the information they need to make informed decisions – the ability to make a difference

slide16

ADAPTABILITY

Creating Change:

encouraging change and continuous improvement

Emphasizing Customer Focus:

understanding customer needs - developing responsive, effective working relationships with customers

Promoting Organizational Learning:

seeing continuous learning and innovation as critical to adapting and leading in a dynamic environment

slide17

CONSISTENCY

Managing Coordination & Integration:

building effective working relationships with a range of colleagues & stakeholders across the organization

Working to Reach Agreement:

engaging in effective problem solving and decision making

Defining Core Values:aligning the behavior of self and others in accordance with the Core Values

beliefs and assumptions the grey area in the middle of the model
Beliefs and Assumptions:The ‘GREY’ Area in the Middle of the Model
  • At the heart of every culture are a set of beliefs and assumptions – about the organization and its people; the leaders; the customers; competitors; the sector; etc.
  • Resolving cultural issues and making progress in the development of a high-performance culture often requires a thoughtful exploration of the underlying beliefs and assumptions.

Beliefs and Assumptions

slide19

Dynamic Tensions

Effective leaders and organizations are Externally AND Internally focused

Effective leaders and organizations focus on Flexibility AND Stability

slide20

Dynamic Tensions

Effective leaders and organizations offer strong leadership AND involve their employees

Effective leaders and organizations balance ‘External Adaptation’AND‘Internal Integration’

slide23

68

29

12

11

9

18

12

55

8

66

63

82

One Hundred Year Old Manufacturing Company

  • First in industry, but declining
  • Trying to hold on to the past
  • 1st time in 20 years failed to meet targets
  • Targeted by competitors
  • President operationally focused
  • “We’re a team going down together
slide25

Culture Links to Business Performance

· Growth

· Stable

Performance Over Time

· Profitability

ROI, ROS, ROE

· Innovation

· Customer Satisfaction

· Operating Performance

· Quality

· Employee Satisfaction

slide26

Impact on Performance

The higher the culture scores, the greater profitability, sales growth, & market value (based on a study of 130 firms; 2000-2010)

Bottom 25%

Top 25%

Return-on-Assets

2.3%

3.2%

Sales Growth

1.4%

23.1%

Market-to-Book Ratio

2.6

4

26

slide27

Satisfying Your Customers

Below 50% Highly Satisfied

Above 80% Highly Satisfied

  • Study of Automotive Service Centers in the USA
  • Total of 338 dealerships and over 12,000 employees
  • Compares organizational culture and customer satisfaction
slide28

Organizational Culture and Employee Engagement

Bottom 10

DOCS OVERALL

Top 10

11thPercentileENGAGEMENT FACTOR 83rdPercentile

slide29

Culture Causes Performance

2 Years

1 Year

In summary, culture comes first and serves as a driver of subsequent performance levels.

when is high consistency bad
When Is High Consistency Bad?
  • When Involvement is low, high Consistency will likely lower an organization’s performance.
slide31

2011 Denison Global Benchmark

  • 931 companies in 48 Countries
      • 50% of the respondents in the last 5 years are from outside the US
  • Headquarter Distribution
    • 28% are Multi-Nationals
    • 75% North American, 14% Europe, 5% Asia/Pacific, 2% Africa/Middle East, 2% Central & South America, 2% Australia/Oceania
  • Wide classification of industries using the North American Industry Classification System (NAICS)
slide32

Why We Use Percentiles

Survey Item Mean % Favorable Percentile

Score (4s & 5s) Score

Most employees are highly involved in their work

There is an ethical code that guides our behaviour and tells us right from wrong

Customer input directly influences our decisions

People work like they are part of a team

There is good alignment of goals across levels

Our vision creates excitement and motivation

for our employees

It is easy to coordinate across different parts

of the organization

3.94

3.78

3.59

3.46

3.21

3.04

2.81

86%

82%

86%

64%

57%

41%

40%

50

50

50

50

50

50

50

slide33

Our Research Is Ongoing

European Journal of Work and Psychology

Reliability and Validity of the DOCS and other measures of Culture

Looking Across the World

Other exciting research

Financial implications of manager / non-manager alignment

Effects of Executive coaching interventions

Unionization and organizational culture

slide36

Culture Data Should Do 3 things:

  • drive honest conversations among the collective about ‘the way we do things around here’ that…
  • lead to thoughtful actions and…
  • results in higher performance
slide37

Honest conversations that lead to thoughtful action… and higher performance

Step IAssessment of the Current State

Goal: To assess the current culture to surface strengths and weaknesses (and identify possible sub-cultures/areas of opportunity)

Step IICreating Understanding

Goal: To engage in dialogue to create a common understanding of the data and discuss the implicationsof the current culture for the business

Step III

Choosing to Shift the Culture?

Goal: To establish agreement regarding the need for culture change/ development AND to focus efforts on areas of business impact

Step IV

Action Planning

Goal: To generate ideas for moving the culture forward; prioritizing and developing specific action plans

Step V

Implementation & Evaluation

Goal: To execute against the action plans and measure progress – with a link back to organizational and/or group performance

slide38

Are our people happy?

Is our culture…good or bad? strong or weak?

Culture

Are we clear and aligned?

slide39

High level of clarity & alignment

Higher levels of performance

Mix of clarity & confusion

Average levels of performance

Confusion & uncertainty reigns

Lower levels of performance

slide41

“Purpose.”

“There’s a clear line-of-sight.”

“The vision is inspiring and exciting”

“We do a good job of Connecting the Dots”

“The focus on short term and long term goals makes the company reach high levels of achievement.”

“We all have the same vision which keeps us focused on what really matters.”

“One-on-ones and 360 reviews provide individuals with constant reminders of our goals.”

“Flying blind”

“My priorities are whatever my boss says they are that day.”

“We’re fire fighters”

“Frustrating”

“Uncertainty is the best word to describe working here.”

“We’re not sure what the future holds.”

slide42

“Communication efforts across departments have allowed broader perspectives and better decisions.”

“We have a Moral Compass”

“My manager lives the core values and regularly addresses them on conference calls – impressive!”

“Alignment”

“We engage in

Constructive Conflict.”

“We solve problems and we move forward together.”

“All the team members believe in doing the right thing and creating win-win situations.”

“Issues remain unresolved and the team stays in flux.”

“Silos”

“It’s all about winners and losers.”

“Stove pipes”

“Self-serving”

“The end justifies the means”

“The leaders don’t walk the talk.”

slide43

“There is a high level of transparency in this organization.”

“We band together to work as a single unit to achieve our daily goals.”

“We've learned to play towards each other's strengths and we work together to improve our weaknesses.”

“I don't feel like I work for this great company - I feel a sense of ownership.”

“We value highly capable people. The talent level here is very high.”

“I feel that I am using my skills and intelligence rather than being micro-managed.”

“We have trouble retaining our best talent.”

“This is a Compliance Culture.”

“Check your brain at the door.”

“Internal competition is valued over cooperation.”

“Leaders believe they always know best.”

“Information is power.”

slide44

“Forgive and remember”

“Change is NOT a criticism of the past.”

“Hiding mistakes is more detrimental than making them.”

“We do project post-mortems

and lessons learned events.”

“We ask ourselves what does the customer want and need when we are looking at our processes.”

“A customer mind-set permeates the organization.”

“Change is not a program…it is a matter of survival.”

“Fear is prevalent throughout the organization.”

“This is how we’ve always done it.”

“Change happens to us, not with us.”

“We can be arrogant…we don’t always listen to our customers.”

“Finger pointing.”

“Our philosophy is Naming - Blaming – Shaming.”

internal and external forces that have the potential to create more uncertainty and ambiguity

Restructuring

Mergers & acquisitions

Internal and External Forces that have the ‘potential’ to create more uncertainty and ambiguity

Leadership changes

Competition

Economy

Regulatory changes

New technologies

slide46

The Denison Solutions

Strategic

Alignment

Mergers

&

Acquisitions

Turnaround

&

Transformation

Building a High Performance Business Culture

Leadership

Development

Leadership

Transitions

slide47

A Solutions Scenario…

A Merger & Acquisition Example

slide49

What is the level of integration and change required?

Absorption

Transformation

High

Degree of Change in Acquired Company

Best of Both

Reverse Acquisition

Stand Alone

Low

High

Low

Degree of Change in Acquiring Company

From Marks & Mirvis, Managing the Merger

slide50

The focus (stated intent) of most M&A’s

  • External Focus
  • Move into new markets
  • Acquire new technologies
  • Increase scale
  • Access to lower cost operations
slide51

The focus immediately afterthe deal closes

  • Internal Focus
  • Alignment of…
  • IT Systems
  • Financial Systems
  • Compensation Systems
  • Sales Process
  • Etc.