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"What you can't measure, you can't manage"

Updated: Apr 25, 2023

Performance does not have to be a coincidence - by Michael Hösterey

In recent years, companies have been incessantly thrown from one crisis to the next. Demographic change, a shortage of skilled workers, disruptive market changes, energy and microbial crises all lead to enormous pressure to transform. Medium-sized companies are particularly affected by this. Companies must not only ask themselves how they can lead their employees through these challenging times, but also whether 'crisis' will not be the new 'normal' in the future and whether there are not concepts to maintain or even increase performance despite turbulence.

The 'soft' factor

What medium-sized companies in particular need in times of constant change is the ability to adapt flexibly to the emerging demands of the markets. Approximately 88% of German companies say that a business model adaptation is the most important prerequisite here in order to be able to successfully face the challenges. However, studies show that about 85% of transformation processes in SMEs are aborted because they fail primarily due to hurdles such as a lack of involvement on the part of managers, resistance in the team and poor management in general. In this context, a very detailed research report by the German Ministry of Labour and Social Affairs also speaks of employee engagement as the most important factor for above-average corporate success. According to this report, there is a correlation of more than 80% between this employee engagement and the culture that prevails in the company or organisation. If companies are to be led successfully into the future, it is therefore not sufficient to focus exclusively on the hard facts, because the 'soft' factor of culture has an enormous effect on the 'hard' figures or the performance of a company. But if I don't know how the 'soft' factor is in the company, transformation efforts run the risk of coming to nothing. Any strategic change intention must take into account the 'soft' factor of the organization, i.e. the question to what extent the organizational culture can still be considered suitable for the future changes and challenges.

No increase in performance without a sustainable organizational culture However, culture as an emergent system cannot be decreed from the top down, nor can it be pressured into a precise direction. "Pressure usually leads to culture finding unwanted ways out, just as plasticine oozes out from between the fingers when the fist is clenched". A targeted influence on organizational culture is only possible by changing framework conditions and structures. In developing a sustainable organizational culture, it is not enough to create a glossy mission statement, which then quickly disappears in the drawer as a suffering image. This not only wastes a lot of paper, but also wears down your staff because they do not feel seen and listened to. Organizational culture in the true sense is much more comprehensive and far-reaching. If I want to get a picture of the organizational situation, the culture of my company, it makes sense to focus on operationally controllable framework conditions such as team relationships, leadership styles, communication and conflict behavior as well as working conditions. Only when I take these so-called 'driver factors' into account can I grasp the culture of the company as a whole and thus the causes of dysfunctional structures and processes, and remedy them in a further step. Because balance sheet figures, absenteeism, fluctuation rates etc. are merely parameters for symptoms, but say nothing about the actual causes of these phenomena. For us, the 'soft' factor of organizational culture is the linchpin for organizational success and the quality of a company's performance. No matter how sophisticated the business management of a business model is, if the organizational culture does not provide a sustainable basis, the change processes will probably fail. Conversely, this also means that if I, as an entrepreneur, have the quality of the organizational culture in mind, I will not leave the performance of my company to chance. Performance can be measured The good news is: the organizational culture or performance of organizations can be measured. Based on scientifically sound items, indicator-based analyses can not only make statements about the current state of a company's organizational situation, but the analysis of leading and lagging indicators even allows a prediction of future developments. According to the Peter Drucker quote "What you can't measure, you can't manage", entrepreneurs are able to sustainably influence the performance of their company with the analysis results and the recommendations for action based on them. An early analysis of performance not only contributes to improving returns, but also avoids expensive crisis interventions and forms the basis for strategic corporate development. Only if I know exactly where the causes of certain dysfunctions lie can I implement appropriate measures in a targeted manner. However, such an organizational analysis is particularly useful before decisive changes such as reorganization and restructuring measures, generation change, succession, mergers or simply business model adjustments. This is because a well-founded analysis not only provides the necessary transparency to know exactly where the company stands, but it is also a motivational basis to convince all actors of the necessity of the transformation processes and to inspire them for the upcoming changes. Become better - stay successful 1 Nordantech,#SHIFTHAPPENS 2022 1 Strobl,H. : und ihr Wandel in Expertenorganisationen


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