“There is nothing so useless as doing efficiently that which should not be done at all.â€
Peter Drucker
Every year since 1983, Bain and Company has surveyed executives in various industries to weight and rate the level of satisfaction and use of over 100 popular tools (e.g., benchmarking, six sigma, corporate blogs). With over 8,504 surveys they have summarized their findings over the last 15 years.
Their results are interesting and can be grouped into four categories with the following tools listed by executives on the basis of both use within their company and satisfaction with the results:
1. Low Satisfaction and Low Use: Corporate Blogs, Six Sigma, Offshoring, and Loyalty Management
2. Low Satisfaction and High Use: Balanced Scorecards, Knowledge Management, and Outsourcing
3. High Satisfaction and Low Use: Mergers and Acquisitions
4. High Satisfaction and High Use: Strategic Planning, Core Competencies, Customer Segmentation and CRM
Rated as higher usage and with only a moderate level of satisfaction: TQM, Mission and Vision Statements, Scenario and Contingency Planning, Strategic Alliances, Supply Chain Management and Benchmarking. Of course, buying a tool at The Home Depot doesn’t ensure you use it correctly–even if it is proven to be the best one for the job!
Question: Do these tools really make a difference in company’s financial performance, customer satisfaction/service and quality?
Answer: In a recent analysis of survey results from over 200 Fortune 1000 firms from 1996 to 1999, Gibson, Porath, Benson and Lawler (2007) explored three broad organizational practices and their impact on specific outcomes((Gibson, C., Porath, C., Benson, G. & Lawler, E. (2007). What results when firms implement practices: The differential relationship between specific practices, firm financial performance, customer service and quality. Journal of Applied Psychology, 92, 1467-1480)). The authors defined these three broad organizational practices as:
1. Information Sharing: These included distribution of information about firm financial results, business unit outcomes, new technology, and competitor’s performance to help employees understand the gap between current and desired level of firm performance.
2. Boundary Setting: These included establishing clear goals, responsibilities & procedures, and facilitating cohesion and coordination through the creation of mission/vision statements, strategic planning, training and firm-level policies.
3. Team Enabling: These practices promote the role of teams in organizations including organizational design with self-managing teams as well training on team building skills.
Evidenced based findings from these authors suggested that no single set of practices predicted all 3 firm level outcomes (financial, customer service and quality) suggesting that each has unique effects. Their results suggested that:
- Information Sharing practices were positively and significantly related to financial performance 1 year following implementation of the practices
- Team Enabling practices were significantly related to quality improvement and innovation
- Boundary Setting practices were positively and significantly associated with customer satisfaction and service
Both the Bain & Company survey findings and recent research by Gibson et al., (2007) provide some wonderful clarity about what interventions and practices lead to specific organizational outcomes. I’ve always like the slogan by Nike — but based on these findings it appears better to just do the right things right….Be well….
[tags]participative leadership, Envisia, Envisia learning, team building, information sharing, core competencies, strategic planning, balanced scorecard, six sigma, customer segmentation, mergers and acquisitions, corporate blogs, benchmarking, mission and vision statements, job stress, kenneth nowack, ken nowack, nowack[/tags]
Ken Nowack
Kenneth Nowack, Ph.D. is a licensed psychologist (PSY13758) and President & Chief Research Officer/Co-Founder of Envisia Learning, is a member of the Consortium for Research on Emotional Intelligence in Organizations. Ken also serves as the Associate Editor of Consulting Psychology Journal: Practice and Research. His recent book Clueless: Coaching People Who Just Don’t Get It is available for free for a limited time by signing up for free blog updates (Learn more at our website)
