By William F. Brandt, Jr.
Exceptional Organizations are characterized by a combination of inspiring visions, well-executed strategies for superior competitive advantage and positive cash flow. Also, strong value-based cultures and the placement of the right people in the right jobs.
These organizations have become “viable” in that they achieve their missions and act according to society’s highest values. They are “sustainable” by being viable over time, and they are a “valued” organization in that all stakeholders benefit to a greater degree than they would with alternative entities.
And such organizations are exceptional because there are so few of them. Few leaders are even aware of the possibility of their organizations becoming exceptional, and fewer still are those leaders who aspire to create such entities. For leaders who do, three criteria are preconditions for success:
First, leaders must have the requisite wills, skills, values, and open mindedness. Second, they need the necessary resources to keep their organizations functioning until they create a competitive advantage that generates a sustainable cash flow. Finally, they need the support of whoever they are accountable to, such as owners, directors or others higher in their organizations’ hierarchies.
For organizations that meet these criteria, the task to create Exceptional Organizations is then simple in concept. The first step is to create a clear vision of the desired organization. While this vision will obviously be unique for each entity, it will also include the “viable,” “sustainable,” and “valued” elements described above.
The second step is to understand the organization’s current reality relative to its desired state. Where there is a discrepancy between the “current reality” and “desired state,” the third step then is to take action to move the current reality toward the organization’s vision. The actions taken can be evaluated for results and modified as appropriate until the desired state is achieved.
While all this is simple in concept, the actual execution is difficult in practice. Strategies for competitive advantage may be elusive. There will be resistance to change, false steps taken and the diversion of energy and resources to the immediacy of other priorities. To carry this effort to fruition requires a strong leader who will remain resolute in spite of these obstacles. Depending upon the size of the entity and the distance to be traveled, the transition may take not only months but years.
William J. O’Brien, former CEO of Hanover Insurance, is an example of a leader who successfully made such a transition. When O’Brien joined Hanover, the company was ranked in the bottom of every industry comparison. O’Brien, and his then CEO Jack Adams, set out to create what O’Brien called an organization of “unsurpassed excellence,” which he said he couldn’t define at the time but which he would recognize when he saw it. It took Hanover twelve years to achieve this vision. But by the year of his retirement, the company had reached the top of its industry rankings. Its earnings per-share were forty- times greater than they were twenty years earlier. Although O’Brien said one could not put a number onto it, the atmosphere in the organization had gone from resignation, compliance, and despair to engagement, commitment, and hope.
At the time I met O’Brien, my company, American Woodmark was struggling through the third year of a major organizational-change effort. We were behind on our performance expectations. We had missed key milestones, we were losing money, and to some our ultimate success was in doubt. Hanover’s results gave us a sense of what was possible. O’Brien’s success provided the lift we needed to persevere. American Woodmark’s sales have grown from $35 million to over $800 million today.
Although the decision to undertake a major organizational transition cannot be taken lightly, given that the preconditions are met, there is a very good probability of success. For those who prevail, the creation of an exceptional organization is more than worth the challenges necessary to bring it into being.
William F. Brandt, Jr., is cofounder and former CEO of American Woodmark Corporation—the third largest producer of kitchen cabinets in America. His books include the winner of 22 Book Awards COMPASS—Creating Exceptional Organizations: A Leader’s Guide and COMPASS TOOL KIT, the teaching companion to COMPASS (www.WinterValePress.com ).
Copyright 2015 © William F. Brandt, Jr.