Foreword by First published in 2014 by Major Street Publishing Pty Ltd @ Nicholas S. Barnett 2014 The moral rights of the author have been asserted National Library of Australia Cataloguing-in-Publication data: ---------------------------------------------------------------------------Author: Barnett, Nicholas S. Title:7 Business Habits that Drive High Performance / Nicholas S. Barnett. ISBN: 9780987542953 (hardback) Includes index Subjects: Employee motivation. Personnel management. Success in business. Dewey Number: 658.314 ---------------------------------------------------------------------------All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher. Illustrations by Elizabeth Barnett Cover and internal design by Anthony Barnett & Elizabeth Barnett Printed in China through Asia Pacific Offset Limited ISBN: 9780987542953 I dedicate this book to the staff of Insync Surveys who are so passionate about helping their clients achieve sustainable high performance. Praise for 7 Business Habits That Drive High Performance “Our highest performing business units all have the highest scores in employee engagement, Client Net Promoter Score measures, Contractor Satisfaction and are lead by our best leaders as measured by their people in our leadership surveys. Our best leaders also deliver the best financial results, are the most efficient in terms of productivity and have the lowest staff turnover. We find the common theme across each of our high performing business units is that the leaders of those business units practise the 7 Business Habits That Drive High Performance. There’s a clear, tangible link. Practise the 7 Business Habits and your business unit will become a high performing business.” Peter Acheson, CEO, Peoplebank Australia Limited “This book is a timely reminder that economics is essentially a human enterprise. The emphasis that it gives is an ever-needed caution about the importance of human factors in any enterprise: it is a lesson that we ignore at our own economic risk. The basis of the presented argument is one steeped in hard-core data and, as such, is one strongly deserving of our serious consideration.” Dr Ronald D Francis, Author and academic. His books include: The science of management (with S. Moss), Leadership in Asia-Pacific (with A. Armstrong & N. Muenjohn) and Business ethics in Australia: a practical guide. “7 Business Habits is a must read for all business leaders. The outstanding learning for me is the fact that success is driven not by any one of the habits alone, or even a few together, but it is only through embracing them all that leaders will drive high performance.” Katie McNamara, Partner, Consulting – Strategy, Deloitte Touche Tohmatsu “In the 10 years I have known Nicholas Barnett I have observed his great ability to grow his businesses and make them successful high performance organisations. What you read in 7 Business Habits That Drive High Performance is what really works and resonates strongly with my own experience.” George Savvides, Managing Director, Medibank Private “The key to delivering sustainable, superior shareholder returns is getting the people dimension right. In any organisation, people are the key to driving high performance – whether in terms of internal productivity or customer satisfaction. Nick’s book provides a simple framework for leaders at every level to understand the importance of creating an authentic vision and motivating their teams to achieve extraordinary performance, within the context of the highest standards of values, behaviours and ethics. This resonates with my experience of leadership in a range of major organisations, which has reinforced the belief that people truly make the difference.” Michael Ullmer, Non-Executive Director, Woolworths and Lend Lease, and previously Deputy CEO, National Australia Bank “Nicholas Barnett’s new book titled, 7 Business Habits That Drive High Performance is well worth the read. Powerfully simple, it concludes that the most important habit is to live an inspiring vision. Everyone wants to be led with a sense of purpose and hope and this result confirms that. Five of the other habits go to the heart of how an organization manages its people and customers – lessons all too often forgotten as hard numbers and egos can regrettably take centre stage. And, yes, finally – it’s good to have sound systems that are accessible, simple and clear. This research is highly consistent with research from our Institute. Making it all happen continues to represent the journey ahead for all of us in the workplace.” Peter Wilson AM, National President and Chairman, Australian Human Resources Institute “At BHP Billiton we have the good fortune to have a charter that recognises the need for superior performance in all our people. In our industry we have the equally good fortune to know that what we do makes a difference; helps improve the lives of millions of people and develops the global economy. To be successful we need to harness the energy of one team. The 7 Business Habits provides a guide to achieve this by creating a clear and compelling vision and fostering a transparent, caring culture underpinned by shared values. Consistently applied over the long term, the Habits will meet the personal needs of each employee by developing trusted leaders who are respected and supported and who create that vision. They will also foster a workplace where each person can make a meaningful, valued and sustainable contribution.” Karen Wood, President, BHP Billiton and previously President, Human Resources Acknowledgements I could not have written this book without a huge amount of support, advice and encouragement from so many people. To those many people, I say a very big thank you! This book, like my first book, GPS for your Organisation®: how to energise your employees and build sustainable high performance, has been a family affair which makes me ever so proud. My eldest daughter, Elizabeth, did all the illustrations, the lettering on the cover and the chapter numbers. My son, Anthony, designed the cover and did the layout of the book. My daughter Sara typed many drafts of the book. My wife, Lisa, as always provided me with much support, wise counsel and encouragement during the 12 months or so that I dedicated to this book. Her unfailing love, unique perspectives and intuition add to the effectiveness of all my endeavours and have made this a better book. A special thank you also to Insync Surveys for supporting not only me in writing this book, but in providing me with access to the important and extensive research upon which this book is based. Those who carried out or assisted with that research or who read and gave me advice in relation to this book included Lily Ivicic, Laura Barker, Laura DaintonSmith, Dr Eva Wachsen and Murray Chapman. Laura Barker met with me weekly, particularly in the early stages, which helped me stick to a project plan for this book that we had created together. She also followed up on many important administrative matters to bring this book to life. To my Executive Assistant, Margaret Rogers, a big thank you for typing and restructuring so many drafts of this book and for acting as my confidant and advisor and providing me with such loyal, outstanding service for the last 12 years. Steve Clifford, Simon Barnett and others also read this book and gave me some helpful advice. Thank you also to Stephanie Rountree and Louise Sweetland who carried out particularly good edits of this book. Thanks also to Ken Blanchard and Renee Broadwell for their invaluable advice in the latter stages of finalising this book. A big thank you to Peter Acheson, Ronald Francis, Katie McNamara, George Savvides, Michael Ullmer, Peter Wilson and Karen Wood for reviewing this book and giving it such wonderful endorsements and also to Brian McNamee who wrote such a fabulous Foreword. You are all true high performers who have exemplified the 7 Business Habits in your leadership of high performing teams and organisations. And finally, thank you also to Lesley Williams of Major Street Publishing for her wise counsel and support and for publishing this book. Contents Foreword by Dr Brian McNamee AO Preface xv xvii Introduction What this book is about and why it is important 100,000 employees can’t be wrong High performance is cumulative Businesses, companies and organisations The 7 Business Habits are inter-related and indispensable Organisational habits, not individual habits Ethical leadership and good governance Not a quick fix Who should read this book? How to use this book effectively How this book relates to the author’s first book 1 1 3 4 5 5 6 7 9 10 11 11 Chapter 1 Habits create cultures Your organisation’s culture is a reflection of you and your habits Geographic, cultural, personality and other differences Dominant cultures and sub-cultures Action checklist 13 Chapter 2 What is a high performance organisation? Financial sustainability Balanced scorecard 19 19 20 13 15 16 18 x 7 Business Habits that Drive High Performance Non-financial measures Lead and lag indicators It’s a journey not a destination The look, feel and smell of high and low performance Action checklist 22 23 24 24 27 Chapter 3 Habit 1: Live an inspiring vision It all starts with an inspiring vision A vision for your organisation, not for the world A shared vision, not just the leader’s vision Connect with the heart, not just the mind A vision must become a way of life A strong foundation in difficult times A minor crack can become a chasm Many vision statements gather dust How to create and embed an inspiring vision Action checklist Chapter 4 Habit 2: Communicate clear strategies and goals Strategy brings vision to life Answer key strategic questions Strategy on a page Invest in clarity of internal communications Add energy and focus with a tagline or slogan Cascade your goals and develop a scorecard Consider the risks Action checklist 29 30 31 32 33 34 34 35 36 37 38 Chapter 5 Habit 3: Develop your people Select, recruit, coach and support the right people 49 51 39 40 41 42 43 44 45 46 48 Contents Unleash the potential within Start with your leaders “On-the-job” development is underrated Develop career paths Holistic education in the organisation’s affairs Partner with others to develop your people Build a mentoring and coaching structure Action checklist 52 53 54 55 56 57 58 59 Chapter 6 Habit 4: Go out of your way to recognise your people Saying thanks makes a big difference Be bold, be surprising Build recognition into your culture and DNA Institutionalise employee and team recognition Recognise strengths even when reprimanding an employee Action checklist 61 62 63 64 65 66 68 Chapter 7 Habit 5: Genuinely care for your people Be authentic Individuals must care for individuals Caring has many dimensions Manage the psychological contract well Inaction speaks loudly too Don’t undo years of great work Action checklist 69 70 71 72 74 76 77 78 Chapter 8 Habit 6: Listen and adapt to your customers’ needs 79 Do customers or employees come first? 80 Where is your money coming from? 81 xi xii 7 Business Habits that Drive High Performance Build relationships, not transactions Move from satisfaction to loyalty to advocacy Build a customer-centric organisation Action checklist 82 83 84 86 Chapter 9 Habit 7: Continually improve your systems Frustrating systems undermine your other good work Align IT and business strategy Recognise the constraints of legacy systems Incremental improvements or wholesale changes? Installing a new system is only step one Action checklist 87 88 90 90 92 93 94 Chapter 10 How the 7 Business Habits inter-relate All 7 Business Habits are essential Habits 1 and 2 form the foundation Habits 3, 4 and 5 turbo-charge your efforts Habit 6 provides the necessary external focus Habit 7 greases the wheels Action checklist 95 95 96 97 99 100 102 Chapter 11 Why incur the cost and effort? Is it worth it? A much better place to work Improved employee engagement and retention Improved customer engagement and loyalty Greater productivity and innovation Greater resilience and change capability Sustainable high performance There will be a lead time Action checklist 103 103 104 105 106 107 108 109 110 111 Contents Chapter 12 How to ingrain the 7 Business Habits How do you know? What gets measured gets managed Treat it like any other change program Use the right brain too Disciplined implementation of initiatives Bring your people on the journey Recognise and celebrate your organisational achievements Recruit people with good habits Be persistent – see it through Keep raising the bar Action checklist 113 113 114 114 116 117 118 119 120 121 122 123 Chapter 13 Why don’t more leaders adopt these habits? Some questions Quick fixes and new fads Old habits die hard Hard heads and hard hearts Lack of leadership and organisational conviction Ego, greed and self-obsession No innate belief in human potential Action checklist 125 125 125 126 127 128 129 130 131 Chapter 14 The importance of good leadership Not just an HR exercise Leaders shape the culture Leaders must walk the talk Leaders inspire Leaders set a clear direction Authenticity and servant-hood is required 133 133 134 135 136 137 137 xiii xii 7 Business Habits that Drive High Performance Action checklist 139 Chapter 15 A 7 Business Habits test for your organisation 141 Appendix 1: About Insync Surveys’ study How this study was conducted The biggest gaps between high performance and low performance organisations Employee and CEO perceptions are linked 145 146 147 152 Appendix 2: Insync Surveys’ high performance framework Alignment and engagement Energise Execute Engage 153 154 155 156 157 Appendix 3: The 7 Business Habits’ test for your organisation 158 xv Foreword by Dr Brian McNamee AO I am delighted to write the Foreword to this book because the 7 Business Habits gel so strongly with my own experience during my 23 years as Chief Executive Office and Managing Director of CSL, a leading global specialist biotechnology group. At CSL, I endeavoured to practise and to achieve simplicity and clarity of message. This book provides a simple and clear message – if you want to increase your organisation’s performance, adopt and live the 7 Business Habits. CEOs and business leaders have many things they need to get right. Most have their own framework, methodology or list of the important few things that guide their thinking and actions. The 7 Business Habits are those important few things when it comes to dealing with and getting the most out of their employees. It starts with adding meaning and purpose and inspiring employees. The next building block is the communication of clear strategies and goals. Habits 3, 4 and 5 turbo-charge your efforts by putting your employees as number one. Habit 6 ensures there is a strong customer focus and Habit 7 greases the wheels as systems and processes are continually improved. As business leaders, we spend an enormous amount of time, money and effort discussing, debating and formulating our strategies and planning our major projects. It’s probably fair to say that we do not spend enough time discussing, debating xvi 7 Business Habits that Drive High Performance and developing plans to change our organisational habits and culture that have such a large bearing on whether our strategy will be executed successfully. This book sets out a simple framework for CEOs and their executive teams to use to ensure that they are practising the right business habits and creating the right cultures to drive high performance. Each of the 7 Business Habits are covered individually in many hundreds of books. The extensive research, however, conducted by Nicholas and his team, shows that the 7 Business Habits are an inter-related and indispensable group of habits that differentiate high performance from low performance organisations. Nicholas points out that you can’t treat the 7 Business Habits as a smorgasbord where you just select the ones you like, nor can you just try some or all of them for a season. To achieve high performance, all 7 Business Habits must become your organisation’s way of life. xvii Preface The message of this book is that boards, CEOs, executive teams and their organisations have within them all they need to substantially lift their performance. They simply need to look inside their organisations at how they deal with the biggest and most valuable asset they have – their employees. Many leaders say their employees are their most valuable asset, many of their actions send a different message. Every organisation is capable of lifting its performance, including those that are already out-performing their peers or competitors. Low performance organisations have the scope to lift their performance even further. Many need to learn some new habits – the 7 Business Habits – and begin to embed them deeply into their organisation’s culture and DNA until those habits become its new way of life. If an increase in performance is to be sustained over an extended period, much of that increase will, necessarily, be derived from the extra focus and urgency of engaged employees who apply extra discretionary effort in the pursuit of their organisation’s goals. The 7 Business Habits, taken together and applied consistently, are the key that will unlock that extra focus, urgency and extra discretionary effort. You can’t force employees to be more engaged. If you try to force them, it will almost certainly have the opposite effect. In those circumstances, they are more likely to withhold xviii 7 Business Habits that Drive High Performance their normal effort and will be most unlikely to provide extra discretionary effort. Whilst CEO of an IT recruitment company, our leadership team and I applied, to varying degrees, what we now know as the 7 Business Habits, to grow the revenue of that organisation in excess of tenfold to over $300 million during a five year period. Around one-third of that growth was achieved through acquisition, with the balance was achieved organically by passionate, committed, competent and highly engaged employees who applied considerable extra discretionary effort in their quest to build the leading IT recruitment company in Australia. I am convinced that had we not lived the 7 Business Habits the way we did, our growth in revenue and value would have been much smaller. As CEO of Insync Surveys, I’ve had the privilege, with our team, of helping measure and improve the engagement, leadership and performance of hundreds of organisations. I’ve had the privilege of meeting leaders of high performance organisations and of many organisations that aspire to high performance. I’ve also met a small number of leaders who aren’t interested in changing their habits and the habits of their organisations, as they have either been content with the status quo or they think it’s their employees who are the problem. The leaders I have most admired have been the ones who have been truly authentic and genuinely cared about their employees and the community in which they operate. Their employees have reciprocated and responded accordingly. Preface The perspective of those authentic leaders has been far broader than making as much money as possible. That has almost been a by-product of living an inspiring vision and being the best that they can be at delivering a differentiated product or service. I have been privileged to have one of Australia’s best and most respected CEOs, Dr Brian McNamee AO, write the Foreword for this book. He led Commonwealth Serum Laboratory (CSL) at the time of its listing on the Australian Securities Exchange (ASX) in 1994 and retired as CEO and Managing Director just short of 20 years later, having transformed CSL into a leading global specialist biotechnology group. During that time, CSL out-performed the S&P/ASX 100 Industrial Index by 2.5 times, which represents around a cumulative 5% per annum out-performance of the average comparison companies and possibly achieved around a 10% per annum out-performance of comparable low performance companies. The 7 Business Habits are well worth adopting, because the difference between high and low performance is so significant, particularly over an extended period. A cumulative difference of only 7% per annum in performance and enterprise value will mean that a high performance entity will achieve double the growth in value of a comparable low performance entity over a 10 year period. There are numerous additional benefits of adopting the 7 Business Habits, including making your organisation a better place to work, improving employee engagement and retention, customer loyalty and advocacy, productivity, xix xviii 7 Business Habits that Drive High Performance innovation, organisational resilience and change capabilities. All of these factors are inter-related and build on each other to increase your performance even further. I hope this book helps challenge your thinking and gives you new reasons and impetus to embed and live the 7 Business Habits for the significant benefit of your organisation, your employees and you. Introduction What this book is about and why it is important Do you wish you knew the main initiatives your organisation could take to increase its productivity, performance and profitability? Would you like to know the main activities that high performance organisations do that low performance organisations do not do? What are the main initiatives that low performance organisations need to take to improve their performance and begin their journey to high performance? What are the main activities on which high performance organisations should expend extra energy in order to lift their performance even further? These and other important questions are addressed in this book. In times of uncertainty and periods of little or no growth many organisations downsize, outsource, restructure, cut or defer discretionary and capital expenditure and find other ways to cut employee and other costs. Many organisations 2 7 Business Habits That Drive High Performance have little extra “fat” to cut without also cutting significant organisational capacity and capability. There is another way. Organisations can significantly increase their productivity and performance by changing some of their organisation’s habits. This book identifies the main things (the “habits”) that most differentiate high performance organisations from low performance organisations. To be truly considered as habits, these things must be so deeply engrained into the culture and DNA of the organisation that they become its way of life. The 7 Business Habits, which are also referred to as the 7 Organisational Habits, are: 2 3 Communicate clear strategies and goals Develop your people 1 4 Live an inspiring vision Go out of your way to recognise your people High performance 7 5 Continually improve your systems Genuinely care for your people 6 Listen and adapt to your customers’ needs Introduction Leaders of high performance organisations embed the 7 Business Habits so deeply into every nook and cranny of their organisation that they are lived no matter what the circumstances, during both good times and bad. They are relentless in their search to find new ways to express these habits and bring them to life. They treat their quest for ongoing improvement as a journey, knowing that there is no finish line. 100,000 employees can’t be wrong The extensive research on which the 7 Business Habits is based draws on the views of over 100,000 employees from around 200 different organisations and was conducted by Insync Surveys in Australia. Those views were analysed to derive the 7 Business Habits. Details of the way the research was carried out and the differences in the views of employees of the high and low performance organisations are included in Appendix 1. The differences in views of the employees of the high and low performance organisations were significant, as can be seen from the charts in Appendix 1. This research was supplemented by interviews with many directors, CEOs and business leaders, including with ten CEOs from some of the highest performance organisations in the research study. Some of the practical advice included in this book was shared by those interviewed. 3 4 7 Business Habits That Drive High Performance High performance is cumulative High performance companies will make significantly more profit and generates significantly more cashflow that they can reinvest in additional capacity and capability than low performance companies. This further compounds the benefits achieved by the high performance companies. Similarly, low performance companies make significantly less profits and have significantly less cashflow to reinvest. If the low performance companies make losses, they will be starved of cashflow and might actually go broke and be forced to close. High performance companies regularly out-perform low performance companies in terms of profitability by up to 30% per annum. If a high performance company outperforms a low performance company by only 7% compound per annum, the high performance company, starting from the same base, will be worth double the value of the low performance company in around 10 years. The extent of the greater performance, particularly over an extended period, is significant. There are numerous other inter-related benefits of adopting and living the 7 Business Habits which also add to the cumulative effect of increasing performance. Those benefits include making the organisation a much better place to work and improving employee engagement and retention. Those engaged employees will give more extra discretionary effort and apply extra energy and focus towards achieving the organisation’s goals. The higher employee retention will reduce employee turnover costs. Customer loyalty and Introduction advocacy will improve, as will productivity and innovation, as a result of having more engaged and longer serving employees and customers. The organisation will also build greater organisational resilience and change capability. All the above will build on each other and increase performance even further. Businesses, companies and organisations The concepts apply to all groups of people that come together for an extended period to achieve an established objective, including to “businesses”, “companies” and “organisations”. Accordingly, these words are used interchangeably The concepts also apply to partnerships, joint ventures, firms, government bodies, not-for-profit entities and charities. The 7 Business Habits are inter-related and indispensable The 7 Business Habits are inter-related and indispensable to the delivery of sustainable high performance. Extensive research has shown that the 7 Business Habits, taken together, are the main differentiators of high and low performance organisations. Leaders who think they can choose to adopt one or more, but not all, of the 7 Business Habits will be disappointed. Those who choose to trial some or all of the 7 habits for a period before 5 6 7 Business Habits That Drive High Performance moving onto something else will be similarly disappointed. It is only by embedding all of the 7 Business Habits and continually improving the way they are lived that organisations can expect to achieve sustainable high performance. Embedding the 7 Business Habits will be much less costly and disruptive than most other productivity and performance programs. In addition to costing less, embedding these 7 habits into your organisation’s way of life will actually add to your organisation’s cohesion and make it a better place to work. Productivity and performance will be improved as a result of the increase in employee engagement and the extra discretionary effort, energy and focus of employees. Leaders will need to walk the talk. If the 7 Business Habits are not continually practised, lived and modelled by the leadership team, they won’t gain traction in the organisation. Leaders must adopt the habits in an authentic way in the belief that adopting these habits will not only increase performance, but it is the right thing to do by all employees. Organisational habits, not individual habits Stephen Covey wrote an excellent book titled The Seven Habits of Highly Effective People.1 That book has been widely read and has helped many thousands of people improve their own individual effectiveness. Mr Covey’s book is focused on the habits that individuals must adopt and ingrain to improve their own effectiveness 1 S. Covey, The Seven Habits of Highly Effective People (Free Press, New York 1989). Introduction and to stand out from the crowd. His book is recommended for young people, in particular, so they can create the right individual habits as early as possible on their life journey. Ingraining those habits will make them more effective people in all aspects of their lives, whether personal, family, business or community focused. Mr Covey’s book identifies the habits of individuals that most differentiate effective individuals from ineffective individuals. This book identifies the 7 Business Habits that most differentiate high from low performance businesses, companies and organisations. In doing so, it identifies the habits that low performance organisations need to begin to adopt if they are to set out on their journey towards high performance. It also identifies the habits that medium and high performance organisations need to more deeply ingrain and excel at if they are committed to continually improving their performance. Organisations are made up of individuals. The 7 Business Habits are things that all employees must do as part of “the way we do things around here”. As the 7 Business Habits are modelled by the CEO and leadership team and practised by employees, they will become deeply ingrained into the fabric and culture of the organisations and become its way of life. Ethical leadership and good governance The traditional view of leadership stated that the primary goal of a leader was to increase productivity, performance 7 8 7 Business Habits That Drive High Performance and profits for the benefit of the organisation’s shareholders. This resulted in many leaders becoming overly obsessed with financial outcomes, no matter the costs or implications. This obsession became inextricably linked to the leaders’ view of their own self-worth and their pursuit of personal gain. Some say this self-serving approach was a cause of the Global Financial Crisis (GFC). Ethical leadership starts from the premise that an organisation’s licence or right to operate is provided by the community. Accordingly, ethical leaders have a high degree of respect for the rights and dignity of their employees, customers and other stakeholders, including their community. They ensure their organisations live an inspiring vision (Habit 1), and develop a worthy purpose that goes deeper than simply pursuing profits regardless of the consequences. Those leaders will empower their employees by making their strategies and goals clear and linking individual goals to the organisation’s goals (Habit 2). Developing, recognising and caring for their employees (Habits 3, 4 and 5) will be priorities for ethical leaders. As ethical leaders hold themselves and their organisations accountable to higher standards of values, behaviours and ethics, their leadership will transform their organisations’ culture and motivate others to adopt those same higher standards. All of the 7 Business Habits are essential to the development and maintenance of ethical leadership. Without ethical leadership, organisations can suffer significant risks to their reputations and sustainability. This has been borne Introduction out over and over again, with the collapses of Enron, Arthur Anderson, HIH and Lehman Brothers being prime examples. Ethical leadership is also an essential element of good governance. Good governance requires that the board ensures ethical leadership is ingrained in the organisation’s culture, that the organisation lives an inspiring vision, and sets and communicates clear strategies and goals. The board is responsible for setting a high tone at the top of its organisation and ensuring the high standards set for integrity, performance and risk management is cascaded down through the organisation. The board is also responsible for overseeing the organisation’s culture and ensuring it is formed and shaped in an appropriate way. This requires the board to regularly monitor progress of the extent to which the 7 Business Habits have been embedded and are being lived, including by reviewing the results of employee and customer surveys and other measures. They should also ensure appropriate action plans, resources and improvement initiatives are put in place to bring about the change required. Not a quick fix If you want to use one or some of the principles in this book as a quick-fix employee-motivational exercise or to gain improved performance without a genuine desire to buy in to the principles, your efforts will probably backfire. Equally, 9 10 7 Business Habits That Drive High Performance you cannot treat the 7 Business Habits as a smorgasbord where you choose the ones you like, nor can you just adopt all or some of the habits for a season and expect the full benefits of higher performance to be achieved. If, however, you buy in and adopt the framework, principles, case studies and practical advice in this book, in a passionate way, then your people will notice. Your words and actions will be in harmony. Your employees are likely to model your example, buy in themselves and join you and your organisations on the journey to high performance. Who should read this book? All leaders and aspiring leaders of organisations should read this book. It provides important frameworks, principles, case studies and practical advice to help organisations start or continue on their journey to sustainable high performance. It is equally applicable to small, medium-sized and large organisations, whether local, national or global. The principles in this book can also be applied in divisions or business units of organisations. This book is also relevant to all public and private companies, government entities and bodies, and not-for-profit organisations. It is particularly relevant to boards, CEOs and leaderships teams, but will also be useful for aspiring leaders and executives. Introduction How to use this book effectively This book has been designed as a leader’s handbook or user’s guide. It does not need to be read straight through from front to back. You can choose to read the chapters or parts that are most relevant to you at the time. An extended contents list has been included for this purpose. It is essential, however, that readers gain an understanding of the importance of all 7 Business Habits and how they inter-relate, so reading the whole book will provide the maximum benefit. It is also recommended that this book be reviewed annually, say at the start of each calendar year, as a refresher and a call to action in relation to any habit or habits that need to be revitalised. There are many other resources available to support this book at www.7businesshabits.com and at www.insyncsurveys.com. au/books How this book relates to the author’s first book The author’s first book, GPS for your Organisation®: how to energise your employees and build sustainable high performance, was published in late 2011. It is a practical guide to help boards, CEOs and leadership teams add clarity and add buy-in to their organisations long-term direction, purpose and values. It also adds focus and urgency to their strategic and business plans. 11 12 7 Business Habits That Drive High Performance GPS for you Organisation shows readers how they can develop, communicate and embed their own Guidance and Positioning Statements (GPS) into their organisation’s culture, messaging and DNA. Both books note that living an inspiring vision and providing employees with meaning and purpose is so fundamental to energising employees and building sustainable high performance. Both books also highlight the importance of communicating clear strategies and goals that are aligned to the organisation’s vision and the importance of leadership and messaging to embed and make the vision, strategies and goals come to life. Habits create cultures Your organisation’s culture is a reflection of you and your habits Who is responsible for creating and maintaining a constructive organisational culture, providing appropriate leadership and delivering compelling messaging? The universal answer is the board, CEO and leadership team. It is not your employees, your customers or someone else – it is you! Leaders are accountable for the culture and performance of their organisations and the outlook of their employees. This realisation is empowering but to some it can also be disconcerting. If things are not going so well, if your employees are not really putting in, or if there is a whole lot of negativity in the workplace, it is all too easy to blame it on your employees or on other circumstances. How many boards listen to, and accept, the CEO’s reasoning for things being a bit tough rather than asking the CEO what he or she 14 7 Business Habits That Drive High Performance needs to change? How many CEOs in those circumstances fail to look at themselves? Unfortunately, the answer to both questions is – too many. If a leader’s prime objective is to make as much money as possible by simply employing workers who are themselves only interested in doing the job in order to be paid, they will end up with employees who are not engaged with the organisation. The leaders will also be unlikely to achieve their planned financial success over a sustained period. Conversely, if they genuinely aspire to build a high performance organisation, they are far more likely to achieve this than those who simply desire to maximise their profits from the business. They will also be more likely to attract and retain employees who take pride in their work as part of a greater whole. Sustained financial success will be a likely by-product. This book sets out the 7 Business Habits that leaders need to adopt and live every day if they want to develop a constructive organisational culture and build sustainable high performance with employees who take pride in their work. If you are not happy with your organisation’s culture and environment and the approach of your employees, take a good look at yourself and your habits. Your organisation’s culture is a reflection of you and your aspirations, messaging, values and behaviours. Habits create cultures Geographic, cultural, personality and other differences An employee’s outlook and approach will depend to some extent on his or her personality, upbringing, cultural background, religious beliefs, geographic location and other factors. Individuals are, by definition, unique. Individual differences can be significant, particularly in different countries and even in different regions. A constructive culture is essential to the effective implementation of strategy. A destructive culture will kill a good strategy every time. Creating a constructive organisational culture with people of different personalities and backgrounds and from different geographies can be a challenge. Some organisations simply allow their cultures to evolve. Others are deliberate about forming and shaping their organisation’s culture with the attributes that are most likely to lead to success. The latter approach is more desirable. Diverse employees can be bound together across hierarchies, geographies and timeframes by a constructive culture. Culture can be the glue that ensures groups have common aspirations, goals, plans and values. If an organisation is explicit and intentional about embedding its vision, purpose and values in its culture and DNA it will develop employees with a greater passion and commitment, no matter what their background or personality. If it talks little about its vision and purpose and is not explicit about the values that it believes 15 16 7 Business Habits That Drive High Performance are important, it is more likely to attract employees with little commitment to its organisation. Cultures built on a compelling vision and explicit values will act as a magnet to attract employees who are inspired by that compelling vision and who live those values; also it will repel those employees who do not live by those values and are not inspired by that vision. Before setting up in new geographies or regions or trying to integrate new acquisitions, boards and CEOs need to make well informed judgements as to whether, how well, and how quickly they can replicate their organisation’s constructive culture. Dominant cultures and sub-cultures Many diversified organisations have a dominant culture that emanates from its head office or its dominant business. The core elements of the culture of diversified groups can be clearly evident. Those core elements often go back to the organisation’s roots; for example, a diversified consumer products retailer may be described as “a grocer at heart” if that is the way they started out. Diversified groups that have strong central control and share resources and systems will be likely to have a dominant culture that emanates from its centre, that may or may not be in the best interests of all business units. Non-core, or peripheral businesses of large groups, usually fail to reach their full potential until they are cut loose. Habits create cultures The sale of Dick Smith electronics by Australian retailer Woolworths, a grocer at heart, is a good example of this. The private equity buyer was able to increase the value of Dick Smith at least five-fold within the first twelve months following its acquisition. The main reason given for the rapid turnaround was that it could develop a far more agile and aggressive culture once it was set free from the heavy weight of Woolworths’ corporate culture. A strong corporate culture will be supportive of the ongoing roll-out of additional offices and stores that have the effect of duplicating the core business. Organisations that choose to diversify from their core, however, need to think long and hard about the impact that the burden of their dominant corporate culture will have on the performance and profitability of their new business unit. The new unit will find it hard to develop its own constructive culture and a compelling vision that is unique yet fits well with that of its holding company. It will be harder to attract and develop committed employees to a non-core business of a group with strong central control. It will be harder to clearly articulate a compelling vision and a unique set of cultural values for the new business unit. 17 18 7 Business Habits That Drive High Performance Action checklist 1Reach a common view with your leadership team on the extent that they are responsible for the outlook and engagement of their employees. 2 Discuss with your leadership team whether your organisation has mainly committed employees working for it and why you think this is the case. 3 Discuss which parts of your culture enable, and what parts inhibit, the execution of your strategy. If relevant, develop a detailed plan to bring about the desired change to your culture.