The key to developing a progressive and expansive management style is to welcome new ideas and then develop systems to implement them. By Cameron Cooper
In 2000, when struggling insurance giant AXA Asia Pacific’s Group Chief Executive Les Owen outlined a raft of ambitious targets, dubbed the K5 program, the sceptics sniggered.
Few thought AXA could be an industry leader or meet Owen’s ambitious goals: to double the value of new business; to enter the top five for net retail fund flows; to reduce the management expense ratio by 50 per cent; to make the top quartile in the Assirt ratings agency’s rankings of service to financial advisers; and to get into the top quartile in the AXA Group Scope survey of employee satisfaction.
Today, on the back of a new culture that promotes ideas, staff creativity and imagination, AXA has staged a remarkable recovery. Net retail funds flow hit $3.7 billion last year, up from $306 million in 2000. Assirt ranked AXA fifth out of 26 fund managers after being near the bottom of the table four years ago. And most of the K5 goals have been met or narrowly missed.
It is a far cry from 2000, when rivals regarded the insurer as a joke a harsh assessment, but one backed up by one of the company’s own: General Manager of Marketing and Retail Products, Richard Shermon.
With funds flow up and profitability turned around, Shermon says AXA is back in the game.
We’ve now become a player in the industry, he says. We were nowhere four years ago. We were seen as a bit of a joke in the industry, unfortunately, only surviving on our heritage and a huge existing book of business, but not really seen as a major force in wealth management.
Crucial to the K5-inspired revival is a culture that values imagination. Staff are encouraged to attend innovation workshops or to submit ideas individually: From small things to off-the-wall ideas.
A lot of people were cynical that it would last for about five minutes and run its course, but it’s been going for three years now, Shermon says.
Many companies claim to yearn for an ideas culture but fail to foster such an environment. It takes commitment from the top down. It requires acknowledgement and rewards for staff creativity. And such inventiveness should be seen as a core competency for staff.
Some companies practise what they preach. Microsoft founder Bill Gates’s commitment to quality thinking time is folklore. On his think weeks, Gates escapes to a remote place where there are no emails or phone calls. He takes time out to think.
Les Allan, a leading Australian process and change management consultant, says generating ideas requires more than shoving a suggestion box in the foyer of an office.
There are few organisations with formal systems in place to nurture and capture and follow through on ideas, he says. The good idea is just sidestepped or ignored.
Allan says follow-up is critical: great ideas will be wasted if systems are absent. A champion from senior management ranks is necessary to ensure ideas are implemented.
Allan advocates process mapping, whereby small teams identify systems and eliminate road blocks to ensure processes are carried out smoothly.
What you want is for anyone in the organisation to be able to pick up a process map and understand instantly what it is they are seeing, he says.
The end result, Allan says, is that ideas are implemented and staff have an enhanced sense of purpose.
Beware the closing down culture
Ian Hutchinson, the founder of Life by Design, a consultancy that advises on employee engagement and workplace culture, agrees that organisations foster a closing down culture if ideas are ignored. The onus is on senior leadership.
Culture is bred from the top down in most cases, Hutchinson says. Unless an ideas culture’ is supported from the top it can become just lip service.
He acknowledges that not all staff ideas can be adopted but suggests demonstrating a commitment to the process by adopting some of the best ideas and showing some small, quick early wins.
There has been a shift away from traditional corporate conferences where staff are bombarded with information, according to Hutchinson. Instead, ideas are now being developed through creativity sessions that rely on techniques such as facilitated improvisation skills to solve problems.
Hutchinson says some organisations encourage a work-till-you-drop culture that ultimately affects productivity and creativity.
You can get every last drop out of employees, but what if they fall over and have a heart attack in five years’ time. There’s a huge amount of intellectual capital that they can retain if they are in the business for a long time.
At AXA, Shermon says encouraging staff ideas is pointless unless management is committed to an implementation process. The insurer has a panel of managers that considers employee ideas every Friday to assess their viability.
An annual award is given to the best concept. Last year, the award went to a marketing plan designed to ensure financial advisers in the insurance sector had a better understanding of AXA’s services and products. Shermon says the resulting nationwide exhibition of AXA products and services to 3000 advisers was the best marketing event we’ve ever had.
The feedback was fantastic. That was one of the reasons that the perception of AXA in industry surveys went up significantly in 2003.
The annual award in the previous year went to the team that developed a computer program to test the quality of AXA’s customer service. Other ideas have been implemented or are in the pipeline.
Shermon says: They are not the great groundbreaking new product or new service, but they do make a difference and it encourages the culture in the organisation to do our little bit to try to come up with ideas and change things.
Deborah Sullivan, a co-director of Creative Coaching Solutions, says there is a clear consequence of failing to engender an ideas culture: staff morale will plummet. Worse still, employees will revolt if bosses cherry pick staff ideas and adopt them as their own.
Sullivan says rewarding good ideas is important. Some staff may want financial kickbacks, while others merely crave recognition.
As a good manager you should actually know what motivates each individual on your team, she says.
The concept of valuing staff reinforces the philosophy of US author and academic Christopher Bartlett, who argues employees should be seen as volunteer investors people who are voluntarily giving their time and talent in a project. The Harvard Business School professor rejects the outdated notion of staff being a cost to a business, maintaining that they should be seen as assets. The message is clear: ignore staff talent, and ideas, at your peril.
David La Ferla, Managing Director of management consulting company NEGOTIACTION, says a wide gap exists between strong and poor performers when it comes to meaningful corporate creativity.
I strongly suspect that organisations are still falling disturbingly short of their potential within our emerging creative economy,he says.
La Ferla believes all organisations have the potential to enhance their ideas culture. [But] they need to recognise first and foremost their creativity sweet spot’ that level of creativity that serves the organisation well and then drive their efforts accordingly.
For instance, he would be concerned if a large global mining company expressed an interest in emulating the ideas culture of a small urban graphic design studio because the quality and quantity of creativity that serves the latter well is unlikely to deliver meaningful commercial results to the former.
Once organisations determine that scope exists to enhance their ideas culture they owe it to themselves to explore the flexibility of their systems, the ingenuity of their people, and the calibre of their internal and external relationships.
La Ferla says employee talent is often wasted to the extent that it causes creative atrophy.
Employees are required to perform familiar tasks and are simply not encouraged to think creatively. They are discouraged from crafting their thoughts in meaningful ways.
He is not sure that management distrust is to blame, rather that many senior managers are only able to function within the formal settings of their organisations.
In all steps of the ideas journey, leadership is critical. Deborah Sullivan encourages businesses to develop a culture that encompasses a coaching philosophy rather than a command and control leadership style.
What that does is engender a philosophy whereby you see the individual as creative and resourceful, she says, while admitting that some leaders are reluctant to hand the reins to staff. [But] there are some managers that are now looking at giving their people more control . . . These types of managers are willing to take a risk. For a really strong CEO, if they let go of control and they put trust in their people, it will end in better results.
Sullivan does not advocate a laissez faire workplace and says managers still need to be discerning about the adoption of ideas. Do a cost analysis of ideas, and assess the pros and cons of taking on that risk.
According to Les Allan, a new generation of people leaders is required to supersede managers who have been promoted only for their technical skills.
Too often, he contends, CEOs are overly proud and try to prove that they can do it all. As a result, they fail to back their employees or their ideas.
One of the outcomes of that is that staff just don’t feel like they are listened to, especially if they come up with ideas and they’re just shrugged off.
It is a scenario AXA is determined to avoid. With Andy Penn now CEO of AXA in Australia and New Zealand (Les Owen is focusing on Asian expansion), the insurer has adopted AXA 6, which raises the bar on the original K5 objectives and adds the goal of growing funds under advice through acquisitions of financial advisory businesses.
Shermon says AXA staff now know they are highly valued. They’re engaged and they know that management takes action following the results of staff surveys, so it’s not just a waste of time.
Process ‘n’ people
According to change consultant Les Allan defining and mapping business processes is simple to do, involves no costly capital expenditure and pays huge dividends in business efficiency and employee motivation.
If you are thinking about mapping your processes, here are 10 key pointers to keep in mind.
Involve employees who actually do the work in the mapping
Employees who do the work are in the best position to know the detailed steps in each process, the common road blocks and bottlenecks and the key contacts in the organisation to get things done. Involve your employees up front by inviting them to join process-mapping teams. Keep managers and supervisors out of the process-mapping sessions, as they have a tendency to dominate the sessions with their own expertise.
Set up one process-mapping team per work area, with no more than 10 employees per team. Look for a team leader with good interpersonal and organising skills and that has the respect of the other team members. The team leader’s first task is to get the team members to brainstorm all the activities they perform and then to group them into separate processes. The following sessions will then see one process mapped per session. If you don’t have a lot of time to spare, teams can meet weekly. Each process should take no longer than two hours to map.
Identify process start and end activities
For each process, clearly identify the start and end. If the team neglects this important step at the start of each mapping session, in their enthusiasm, extra activities will quickly creep into the picture until the process becomes unmanageable.
Identify process objective and inputs and outputs
The team leader should ask employees why each process is performed and what are the expected results of each process. Not only does this help to focus attention on removing non-value add activities, but it also gives employees a sense of purpose in their working life. Instead of work being a disconnected set of meaningless activities, employees begin to appreciate that everything they do helps to achieve a bigger goal.
Identify customer and supplier requirements
Each team needs to work out who the suppliers and customers of the process are. This step is critical as it identifies who the team needs to work with collaboratively to maximise business results.
Conversely, the team needs to clarify what it is they need of their suppliers, both internal and external, to perform their process effectively and efficiently. A purchasing team may require other departments (suppliers) to fill in all fields of the purchase order prior to submission. The customers of the purchasing team (other departments) may require orders to be fulfilled within two days unless placed on backorder. As in this case, suppliers of the process can also be customers. Seeing how their own local processes fit into the wider organisational processes and goals allows employees to see the big picture.
Identify a process owner for each process
For each process, specify one Process Owner. Identifying one person who is responsible for the process end to end is critical to ensuring process efficiency.
Manage the level of detail
Each process map should take up no more than one page, with its definition taking up just one other. If a map takes up more than one page, identify subprocesses within each process and show each subprocess on a separate page.
Use standardised mapping conventions
What you want is for anyone in the organisation to be able to pick up a process map and understand instantly what it is they are seeing. Standardise on mapping conventions and formatting of the maps. Mapping symbols, flow direction, page layout, fonts, titling and so on should be the same from one map to another. Keep the number of flow chart symbols to a minimum. You should need no more than six to keep the maps easy to read.
Get agreement on the process
The most beautifully documented process will mean naught if there is little commitment from the major actors to follow them. You need formal sign-off from the process-mapping team leader, the Process Owner and the managers of the interfacing processes (both supplier and customer).
Document the process
The most important thing that team leaders can do after the team agrees on the process definition and steps is to write it down. I remember working with one nationwide distribution business where at the end of a mapping session with a group of managers, two of the managers came to me and said that this was the best thing since sliced bread. You see, they had held meetings before to thrash out and decide process flows and responsibilities, but nobody wrote down what they agreed. Two weeks after the meetings, these managers lamented, nobody could remember what they had agreed.
Convey management commitment and train your teams
Although mapping business processes will not cost you much in capital expenditure, it is not for the faint-hearted. The management team will need to show unswerving and visible commitment to the project. Teams will loose faith and energy quickly if management support is piecemeal or grudgingly given. Team leaders will need time management and organising skills, along with interpersonal skills and analytical thinking.
Les Allan is a leading process and change management consultant. Les has designed and mapped processes for a range of organisations, including Fujitsu, Pacific Dunlop and AXA.
Les is a member of the Australian Institute of Management and the Quality Society of Australasia. He is also a member of the Divisional Council of the Victorian Division of the Australian Institute of Training and Development (AITD). To find out more about business improvement, visit www.businessperform.com.