| Building a Culture of Credit Union (and Scanlon) Excellence:
Major Report Published | | 
All organizations can now benefit from the results of a conference for Credit Union Leaders back in December at Loyola University in Chicago. The event, sponsored by Filene Research Institute, featured Scanlon Leadership Network and Watermark Credit Union, as well as other Network members. The event was a brilliant success with interest in Scanlon spread to other credit unions, and the recent publishing of a major white paper report by Filene Institute.
The report, Building a Culture of Credit Union Excellence: A Colloquium at Loyola University Chicago, is an in depth capture of the proceedings of the conference. The nearly 50 page report is loaded with invaluable information for credit unions, as well as organizations in any industry.
What you will find in the report:
Chapter 1 Of Managers and Motivation
Chapter 2 Creating a Culture of Innovation and Excellence
Chapter 3 The Watermark Credit Union Experience
Chapter 4 Lessons from Other Industries-Landscape Forms
Chapter 5 Building a Culture of Credit Union Excellence
Chapter 6 Conclusions and Next Steps
The article is a real showcase piece for Scanlon Leadership Network because of the rich content contributed by some well known names in Scanlon circles; Professor Dow Scott from Loyola University; Chuck Cockburn, President of Watermark Credit Union; Bill Main (President) and Becky Fulgoni (VP for People/Operations) of Landscape Forms, and Paul Davis from Scanlon Leadership Network. All of these people were prominently recognized in the report by Filene Institute.
You can read the report by clicking on the following link, by contacting the Scanlon Leadership Network at office@scanlonleader.org, or by contacting Filene Institute directly.
Download "Building a Culture of Credit Union Excellence"
| | Assessing Gainsharing Readiness | | 
by Brad Hill, Certified Scanlon Consultant
Many organizations with an interest in gainsharing look to external benchmarking practices to determine if a competitor or admired organization's program can be applied in some fashion to their own organization. The effectiveness of gainsharing in your organization will not be related to outside successes, but rather to the culture and work environment at your organization. This article will help you assess whether gainsharing will improve business success in your current work culture, or what can be done to begin creating an improvement-oriented environment.
Enablers of Successful Gainsharing Programs
Although there are scores of factors that comprise your work practices, there are five that directly relate to the success of gainsharing. These factors are referred to as the enablers of gainsharing programs.
Is the organization focused? The extent to which the organization has a clear business focus and consistent goals and direction will influence the success of the program. Through cascading goals, employees must understand how their individual ideas and actions contribute to overall business success.
Does the culture support team performance? The degree to which accomplishment of objectives depends on integrated efforts among employees and departments will influence the success of the program. Not all employees belong on a team, but all employees can direct efforts toward improving business processes that transcend their individual area of accountability.
Is the workforce empowered to initiate positive change? The extent to which employees are encouraged to use their initiative to take actions, to take risks, and to suggest improvements will influence the success of the program.
Is there a willingness and ability to change? Successful change is dependent on trust and achievement motivation. The extent to which: 1) employees trust the organization and its management and supervision; and 2) employees are more motivated by the desire to get the job done than by fear of making mistakes, will impact the success of the program.
Do human resource programs support performance planning/measurement? The effectiveness of measuring job performance and whether employees view the current compensation system as equitable and motivational will impact the success of the program.
Strong positive responses in these five areas should encourage the organization to design an effective gainsharing program, regardless of any external "benchmark" findings.
Supportive Employee Work Practices
In order to determine whether gainsharing is likely to result in a positive behavioral change for employees, Tandehill developed a Work Practices Survey3. The survey is comprised of 64 questions which relate to the five enablers described above. Companies choose a couple of questions from each of the enabler categories, no more than fifteen in total (to limit completion time to 10 minutes), and distribute the survey to all employees who will potentially participate in the gainsharing program. Following are some excerpts from the survey. The numbers in parentheses are the percent of respondents in the normative database that agree with the survey statement.
Business Focus Statements
· I know how my job can impact the organization's financial results. (84%)
· I am adequately informed about how well the organization is performing. (71%)
Companies that fall significantly below the survey norms should consider developing a system of cascading measures. Companies above the norms should probably focus their efforts elsewhere.
Team Dependence Statements
· Teamwork is very important to the organization's success. (92%)
· This organization encourages cooperative efforts. (49%)
Companies that fall below the team dependence norms should consider de-emphasizing organization charts and job descriptions and begin focusing on business processes and supporting employee roles. The creation of super-ordinate goals will also encourage cooperation and create some immediate behavioral changes.
Empowerment Statements
· Management listens to my ideas for improving productivity/reducing costs. (37%)
· Decisions often made at a higher level could be better made at a lower level. (61%)
Companies struggling with empowerment must think through the roles of executives, supervisors and associates in an empowered environment, and that often means increased training levels with regard to coaching and feedback, presentation skills, meeting skills and process improvement techniques. The empowerment experts at Ritz-Carlton establish the 20 Ritz-Carlton Basics, rules for performance, but allow employees to great flexibility in solving customer problems.
Trust and Commitment Statements
· If I work harder, I will earn more at the organization in the long run. (37%)
Not many companies have the level of trust and commitment we might expect. Unlike the other areas surveyed, there are no tools to alleviate distrust. Rebuilding employee trust may take years and is not accomplished with promises and edicts, but rather with consistent fair dealings with employees, and an environment that respects the dignity and contributions of all employees. To foster this commitment, employees must connect to a higher goal than accomplishing their job's objectives.
Motivation Needs Statements
· I have a lot of ideas on how to improve productivity in my area.(62%)
Gainsharing is intended to motivate a behavioral change, and employees cannot be afraid of making that change. Ken Iverson, founder of Nucor Steel, taught his associates that there is more learned by making a mistake than by getting it right, so "go out and make a mistake." Nucor employees are motivated to get the job done.
Individual Performance Management Statements
· Supervisors/management lets me know if I'm doing a good job. (51%)
· I have a good understanding of how my performance is measured. (57%)
· The end results of my job are being effectively measured. (37%)
Individual performance management does not imply individual rewards. In a team environment, individual recognition will probably make three people unhappy for every one person it makes happy. Although gainsharing is focused on group improvement, it must be built upon an individual performance management system that encourages the associate to develop the skills and competencies necessary for long-term success and survival at the organization. Gainsharing will reward business results, but the means to achieving those results will be associates attaining more skills, asking for more responsibilities, and striving to develop those competencies that will drive long-term business success.
Current Pay Practices Statements
· Current pay practices strongly influence my activities on the job. (33%)
The enemy of effective pay programs is entitlement. Gainsharing programs typically have a targeted payout of $0. It is only if employee efforts create a quantifiable performance gain that there will be any sharing. Despite this stern warning, these programs pay out over $254/quarter on average and generate a 115% ROI for the organization.
Comparing your organization's survey results to a normative database like the one above is an excellent way to obtain defensible, quantitative data on the areas your organization needs to improve. But it is also important to understand the "hows" and "whys" behind the numbers. A successful assessment should therefore also include employee and management focus groups built around the findings of the Work Practices Survey.
In the August Ezine: Translating Readiness into Success
| | Compression: What is the Difference that will Make the Difference? | | 
by Jahn Ballard
"What is the difference that will make the difference?" "What day is it?"
The great Gregory Bateson asked this first question over three decades ago, and it has stuck with me ever since. In a world where the endemic overwhelm, overlapping bottlenecks and cascading ambiguities not only dominate the work lives of CEOs and senior leaders, but is also dominating many people with line responsibilities as well, where does it all end? The short answer is - badly. [NOTE: If you did not see it, you may want to review " Compression: Dealing with a Changed World" from the last June Scanlon E-Zine for an introduction to a Compression view of sustainability.] Dr. Carl Frost loved to ask the second question, which in this day may require a different approach to answering than has worked in the past.
In Compression, Doc Hall lays out in the first 5 chapters the situation we face in great detail, which will likely leave anyone who has not already seen it all laid out as a whole, and had a chance to come to terms with the enormity and degree of challenge we face, with a lot to heavy sorting out to do. The draft of the book is now available to review for any Scanlon Member. If you want to skip to the 'what do we do about it' part in the last two chapters, he encourages that so you can be fortified for the reality sandwich he has prepared. Doc's prescription is that we all must get very competent at creating what he calls 'vigorous learning and work organizations. Ideas for doing this come from the best operationally performing organizations today: servant leadership, professional attitudes, lean and quality concepts applied by all, the ability to do what is needed with minimal command and control, and with a communication network sized for vigorous humans' learning capacity."
What day is it?
I want to focus here on the crucial first step that is required before anything else will be successful - what Doc calls in chapter 7 the capacity for comprehensive organizational self-auditing. As Scanlon Steward Paul Davis says, "The primary Scanlon Principle is Identity. It is the ability to understand reality. A new reality is facing humanity. Doc Hall's term Compression describes many changes, from the end of cheap energy to the problems of pollution and waste. Others have viewed different aspects of the same set of challenges and written about 'cradle to cradle' 'green' or 'sustainability'. Scanlon organizations pride themselves on 'changing forever'."
As always the first step to understand the world must be to understand ourselves, and how we got where are in the first place. I suggest we consider that perhaps there are pieces of reality that we have been missing all along, which is what allowed the current situation to get so far, and we still don't have a handle on it. I suggest that our capacity to measure is fundamentally flawed to such an extent that we don't have the capacity to comprehensively know what our reality is. In his seminal work, Transforming Performance Measurement, Dr. Dean Spitzer of IBM Research takes a hard look at the reality of our broken measurement systems, and lays out a path to rethinking how we drive and measure organizational success he calls Measurement Maturity.
One the first and most crucial victims of our broken measurement systems is trust, perhaps the most foundational element of building an optimally collaborative culture. Unfortunately, even with the highest levels of mutual respect and individual competence, the insidious and continuous erosion of trust created by fragmented measurement processes remains a pernicious underminer of cultural coherence and cooperation. Dr. Spitzer and his publisher, The American Management Association, have kindly given permission to begin using several of the instruments in the book to help senior leaders with the heretofore difficult or impossible measurement issues to assess.
If you would like to do a rapid and focused evaluation of either your organizational trust and/or measurement maturity levels, you can download the instructions here. In return, we will request you share your results with us as part of your Scanlon membership file, so we can contrast and compare to both other Scanlon members and other companies.
Collaborative system audit as foundation for success-driving internal controls
Evolving comprehensive measurement capacity must begin by first doing a thorough reality check. In the case of an entire organization, that must include both a complete picture of the organizations performance management framework and an overall view of the basic organizational design. Organizational Design is perhaps seen simply as how well both talent and assets are optimized to deliver value, and how the value proposition itself is structured and how it can evolve. This will include everything from the personal vision of the CEO, to the reporting and decision-making structure, the compensation design, the use of information technology, the energy and the resilience of the culture, plus how the disciplinary and functional silos have evolved and are being addressed. Included in the link above are also instruments for assessing organization design, performance management and financial coherence if you are interested in building your own reality checking resources.
Next time we will briefly examine how to use a whole system audit to then install the capacity to actually "steer your ship" collaboratively through rapid prototyping of the business model; and how this creates a foundation for all key stakeholders to participate in evolving a transparent collective understanding of the whole system. In this way leaders can gain more power over reality by distributing influence. This creates the capacity to empower those who actually do the work to design the measurement system that provides them the feedback that can then direct their decisions and use time to sculpt together the reality you all want to create.
* See The Lean and Green Summit web site to learn details of another of Doc's many projects (see sidebar), on which he is collaborating yet again with Jim Huntzinger and Dwayne Butcher, creators of the breakthrough Lean Accounting Summit.
Jahn Ballard enables Owners/Entrepreneurs/CEOs and their senior teams to design their ideal jobs, focused primarily on fully leveraging the talent available and evolving the business' value. Employees spend more of their time doing what only they can do for the good of the enterprise, and their time overwhelm and distractions are transformed.
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