Got a Solution?: HR Approaches to 5 Common and Persistent Business Problems

Got a Solution?: HR Approaches to 5 Common and Persistent Business Problems

by Dale J. Dwyer, Sheri A. Caldwell

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Product Details

ISBN-13: 9781586443665
Publisher: Society For Human Resource Management
Publication date: 10/01/2014
Edition description: None
Pages: 217
Product dimensions: 6.10(w) x 9.20(h) x 0.70(d)

About the Author

Dale J. Dwyer, PhD is a professor of management at the University of Toledo. He lives in Arlington, Virginia. Sheri A. Caldwell, PhD is HR Director at the Grain Division for The Andersons. She has held top human resource management positions at Hickory Farm, the University of Toledo Physicians Group, the Toledo Zoo, and American Identity. She is past president of the Toledo Area Human Resource Management Association and was on the human resources committee for the American Red Cross. She lives in Oregon, Ohio. Dale and Sheri are also the coauthors of Got a Minute? The 9 Lessons Every HR Professional Must Learn

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CHAPTER 1

Missing the Mark: Why Organizational Problems Don't Get Solved

"The measure of success is not whether you have a tough problem to deal with, but whether it is the same problem you had last year."

— John Foster Dulles, former secretary of state

One only has to look at the recent headlines or the never-ending television reports on the current condition of U.S. organizations to know that a host of problems confronts all of them. Many of these problems, of course, we blame on the financial crisis, government regulations, and general malaise of our country's political, social, legal, and economic systems that have dominated much of the last 20-plus years. However, though many of the problems have been exacerbated by these systems, most organizational problems have not been caused by these external systems. Rather, the responsible parties are generally managers who have missed or misinterpreted crucial environmental information and, as a result, have made decisions that have led their organizations to their current level of instability and, in some extreme cases, eventual demise.

In this book we examine some of the most common problems and issues that organizations have faced in the past few years. Moreover, we take an additional step of proposing resolutions to these problems by using an underused resource — employees. Our basic premise is this: In times of organizational trouble, making full use of the organization's human capital will save the organization. As a corollary to this premise, we offer another: If an organization's employees are not capable of helping an organization in times of organizational trouble, then the management of the organization is to blame for making poor HR decisions (that is, selection, training, evaluation, development, discipline, and termination).

We realize that these are controversial statements. However, many organizations have found these statements to be true for them. We hope you will discover throughout the book some novel ways to address your organization's problems by making full use of the competitive advantage that your employees provide.

All Organizations Have Critical Problems

Regardless of the perceived level of an organization's success (and by "success" we mean that it is growing, profitable, and outperforming its competitors and that its customers are happy), all organizations have problems, many of which go unresolved. In fact, the majority of these problems turn out to be critical predictors of an organization's continuing success or its inevitable decline. What is most concerning, however, is that top managers often do not know how severe the problems are, and some managers are not even aware that critical problems exist in their organizations until it's too late to do much about them.

How can that be? Senior managers are in charge, aren't they? Shouldn't they know what is affecting their organization's success or failure? We believe there are two basic reasons why many senior managers do not see the existence or severity of organizational problems.

First, when an organization is successful, managers believe they are effectively addressing any problems or issues before they become critical. In other words, the mindset here is that if an organization is successful, it must not have critical, unsolved problems. Consequently, the managers believe that they are aware of and in control of those things that affect the firm's success or failure.

Second, managers and employees alike have learned over time to tolerate problems so that they become almost invisible. As a result, the organization has learned to "work around" problems, rather than to tackle them head-on. Think about the last time you heard someone in your organization say something like this about problem X: "Yeah, everybody knows about [problem X], but we don't pay much attention to it; nobody wants to deal with [the red tape, specific person, agency, vendor, central office], because it's just easier to [alternative workaround action or behavior]."

In the first case, managers who believe they control those things that affect the success or failure of their organizations are deluding themselves. Organizations have critical problems primarily because the environment in which they are operating has changed. Although it is certainly true that managers control how they respond to (or adapt to) the environment, they do not control the environment itself. To grasp this realization requires a change in mindset about the extent and type of impact that managers have on their organizations and, more importantly, what role(s) they play in anticipating and addressing critical problems.

In the second case, what has been an invisible problem, or one that has been avoided or tolerated, can become catastrophic when the environment significantly changes. That is to say, an unsolved critical problem is a ticking time bomb that may or may not explode, depending entirely on the extent and type of an environmental change.

All of us have seen this play out in a host of different industries, organizations, and places in the past few years. One recent example was Toyota, which fought to protect its tattered reputation in the United States in public hearings on whether it properly handled recalls and other safety issues surrounding the unintentional acceleration of some of its vehicles. One member of Congress categorized Toyota's approach to unintended acceleration complaints this way: "There was kind of an attempt to sweep everything under the rug, keep it under the table, not tell anybody, and maybe it'll just go away."

Of course, responsible business professionals know that problems don't "just go away" by themselves. In 1982, Johnson and Johnson responded to the cyanide-poisoned Tylenol capsules by immediately removing 31 million bottles of Tylenol products from the shelves, promptly changing the bottle by introducing the first triple-seal, tamper-resistant package, and making presentations to the medical community and to consumer groups to explain the safety changes. The company's swift actions quickly restored lost market share and regained the confidence of consumers and, thereby, was the key to the brand's survival.

The Relationship of Organizations to Their Environments

How critical a problem is depends not on the specific problem or organization, but on how the organization relates to its environment, that is, the organization-environment fit. Whereas a particular organization's problem might be tolerable in one environment, it can be catastrophic in another environment. Hence, the larger the disparity between the fit of an organization with its environment, the more visible and potentially catastrophic an unsolved critical problem becomes. The following environmental aspects are common sources of poor fit:

• Regulatory fit — how well the organization adapts to and complies with laws and regulations.

• Economic fit — how well the organization fits within the larger economy.

• Market fit — how well the organization's products or services suit the market(s) it is pursuing.

• Competitive fit — how effective the organization is in its market compared to its competitors.

The greater the total disparity in all four categories, the poorer the overall fitness level of the organization and the more likely unsolved critical problems will become cataclysmic. For example, if your competitor becomes much more effective than you at improving its services and, subsequently, is able to reduce its prices and increase its margins, this creates pressure on your organization to spend money to become more competitive, thereby reducing your margins and profitability. In this case, the competitive fit of your organization and its environment has become degraded. Likewise, if your organization has high fixed costs, low or inconsistent cash flow, or high debt, these may be tolerable inconveniences in one environment but may become crippling problems in a highly competitive situation, threatening to place your organization in peril.

Degraded fit relationships often emerge unseen by top managers. Companies are sometimes so intent on keeping out the "wolf at the door" they miss the one in "sheep's clothing" sneaking in undetected. By the time the financial impact is strong enough to be noticed, it is often too late to do anything except take drastic measures. Remember — poor fit happens because the environment has changed but the organization hasn't, or the organization has changed but the current environment no longer supports it. Many of the well-known, recent organizational failures occurred because the organization-environment fit worsened, and managers did not address it early enough to avert catastrophe.

For example, consider the situation of the well-known, big box store, Best Buy. At its highpoint, the chain of 2,900 stores accounted for almost one-third of all consumer electronics purchases in the United States. In the ensuing years, however, Best Buy got into grave financial trouble. Early in 2012 the CEO, Brian Dunn, explained its predicament to a group of investors:

Over the last three years, the industry experienced little innovation [in] many of the large traditional consumer electronics categories such as television, PCs, and gaming. At the same time, consumers have enjoyed greater price transparency and ease of costs shopping. As a result, we knew we had to accelerate our cost reduction efforts, adjust our sales mix, and significantly improve on the experience we were delivering for our customers. All of this in the most uncertain consumer and electronic environment we've ever experienced.

The reality is that the cost structure, the sales mix, or the customer service quality was not the culprit here; rather, the technological environment had changed. As Larry Downes noted, "High-speed mobile broadband, cloud computing, tablet devices and the modular nature of app stores have utterly changed not only which products consumers buy, but how they shop for them, upgrade them, service them, and replace them." Best Buy, along with other big box electronic retailers, may not have adapted quickly enough to its changing market and competitive environments.

The Nature of Organizational Problems

Like most things, problems fall along a spectrum. At one extreme are problems that organizations can tolerate indefinitely, albeit they are expensive and time-consuming to tolerate. Examples might be high absenteeism and inventory shrinkage. At the other extreme are problems that cause the decline and eventual death of the organization. Examples of this include having low cash flow with high operational costs or poorly trained employees who produce low-quality goods and services. In the middle are all sorts of variations on these themes.

One of the most misunderstood concepts in addressing problems in organizations is that, given discerning minds and the will-power to do so, all problems can actually be solved. The reality is that most organizational problems require ongoing resolution, rather than one discrete solution. Once a manager understands this, he or she can begin the hard work of managing the resolutions.

In some ways, it is like a patient who has been diagnosed with diabetes. Diabetes is not always a terminal disease; rather, once a patient understands that it is a disease to be managed, rather than one that will be cured, the patient learns to live with the realization that he or she must consider what actions to take each day to make life as full and as healthy as possible. There may be no discrete solution (cure) for the patient's diabetes; there is only ongoing management of the problem (disease).

If your organization is like many others, you are probably dealing with problems that seem overwhelming and unsolvable, such as rising costs of health care, energy, material, and labor. If you are convinced that these are "terminal diseases," then you will likely (a) avoid dealing with them until the pain is intolerable; (b) react by blaming someone or something that you perceive to be the source of the malady, such as government regulations, large competitors, overseas suppliers, ambivalent donors, labor unions, or unmotivated employees; or (c) give up entirely. The result of any of these actions is that you begin to perceive your organization as a victim — powerless and at the mercy of others — and this is never helpful or productive in addressing problems.

Avoiding the Victim Mentality

A victim mentality in organizations occurs whenever something external to the person or the organization is blamed for the problems negatively affecting it. In essence, "victims" do not see their own roles in creating or sustaining the problems in their lives.

Furthermore, victims deny responsibility for their actions. They are quick to blame other people and events for anything that has not worked in their situations. As Richard Bach said in his book, Running from Safety, "If it's never our fault, we can't take responsibility for it. If we can't take responsibility for it, we'll always be its victim."

Victims are usually angry with the people, entities, or events they think have "done them wrong." Underneath these feelings of anger is almost always the feeling of powerlessness. They are angry because they do not know how to solve the problem and, more importantly, they believe they are all alone in doing so. And, more troubling, victims do not readily ask for help.

Finally, victims lack the resilience to bounce back after experiencing loss or disappointment. They take on a defeatist attitude that carries over to other aspects of their lives and, as we mentioned earlier, this is not helpful because other problems or critical situations may continue to surface.

For organizations, a victim mentality damages employee morale and the overall climate of the organization, and it stifles the will to work on the critical problems. However, understanding the role that organization-environment fit plays in revealing or creating pressing problems is helpful. This understanding permits managers and employees to work together on resolving and managing the real problems in their organizations without blaming each other for why they occurred.

CHAPTER 2

Does This Make Me Look Fat? Analyzing Organization-Environment Fit

"The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong questions."

— Peter Drucker, from Men, Ideas & Politics

In the last chapter we discussed why critical problems in organizations usually don't get solved and how they are related to the organization-environment fit. Now it is time to look at information about the fit between the organization and its environments to understand potential problems and their likely effects on the organization.

Before we get into the specifics, it is worthwhile to consider that much of the information needed to analyze an organization's fit with its different environments takes managerial courage to seek out and confront. Sometimes managers feel threatened by information that calls into question their past judgments and decisions. When they feel threatened by such information, they have a tendency to ignore it, discount it, distort it, or avoid it altogether. This, of course, only serves to create additional problems, not the least of which is tension and uncertainty with employees and, later, with other stakeholders such as customers, clients, patients, vendors, suppliers, and shareholders.

The kind of information we are talking about generally indicates some imminent peril for the organization. It may also suggest that unsolved critical problems actually could be resolved if the organization could correctly gather and process the necessary information to do so.

And, therein, lies the root of the issue. If organizations are not gathering and analyzing the correct information, or they feel threatened by it, their critical problems will only continue to worsen until they feel powerless to change anything, which begins a downward spiral that usually ends in disaster.

What Is Critical Information?

Critical information is in the eye of the beholder. Information that might be perceived to be critical to a marketing director may not seem at all critical to a plant manager.

However, from a systems-wide perspective, any and all information (such as the following examples from our survey respondents) should be seen as critical cues for indicating potential issues with the organization-environment fit dimensions discussed in Chapter 1. The list that follows contains a few examples from our respondents:

• The quality or price of an organization's products or services is similar to competitors.

• Products or services have a small market share compared to competitors.

• Positive customer service ratings from customers are below 80 percent.

• Litigation or grievances require management's attention most of the year.

• Employee turnover is higher than industry standards.

• Operations are at less than 80 percent efficiency.

(Continues…)


Excerpted from "Got a Solution?"
by .
Copyright © 2014 Dale J. Dwyer and Sheri A. Caldwell.
Excerpted by permission of Society for Human Resource Management.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Preface vii

Acknowledgements x

Chapter 1 Missing the Mark: Why Organizational Problems Don't Get Solved 1

Chapter 2 Does This Make Me Look Fat? Analyzing Organization-Environment Fit 9

Chapter 3 Common Business Problem #1: Fads, Flubs, and Failures: How Do We Keep Vision-Focused and Strategy-Directed? 39

Chapter 4 Common Business Problem #2: Playing to Win or Playing Not to Lose: How Do We Become More Competitive in Our Marketplace? 65

Chapter 5 Common Business Problem #3: Ad Quod Damnum: How Do We Deal with All the Changing Laws and Regulations? 89

Chapter 6 Common Business Problem #4: Extreme Makeover: How Do We Attract and Retain the Most Competent Talent? 123

Chapter 7 Common Business Problem #5: Future Shock: How Do We Deal with a Changing Society? 157

Chapter 8 Concluding Thoughts 181

Appendix: Resources and Tips 185

Endnotes 195

Index 205

About the Authors 214

Additional SHRM-Published Books 216

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