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Understanding the symptoms of organizational health issues: An applied example with Sean Kelly

When we are looking at how we can diagnose and assist with improving organizational health as OD practitioners, a huge part of our role is to ensure that we can recognize the symptoms of poor health quickly.

That can often mean being involved in a project or organization for some years as these types of issues are usually long term and require hard work, dedication, and ongoing action to get the results desired. 

I spoke with Sean Kelly about how he’s tackled the symptoms of poor organizational health in the past, what the far-reaching implications were and what steps he took in working with the business to ensure they achieved the best results possible at the end of the day. 

Sean discussed a very interesting example about a large food manufacturer he was invited in to help with, as they were experiencing issues with leadership communication, profitability and turnover, staff retention and clarity of strategy, goals and vision. 

“I was working with a very large manufacturing organization involved in the food industry. They reported a high turnover of 300million plus, but only delivering a net profit of a quarter of a million – which is unusually low when your turnover is so high.

I was invited in by the chief executive, who was relatively new to the business at the time, with only three months in the role. He wanted to dismiss a lot of the senior managers there, believing they were causing a number of issues within the organization. Rather than taking such a gung-ho approach, I sat down with him and discussed that we needed to discover what the root cause of these issues were, and to find out why he believed the senior managers were the issue of non-performance in the company. 

I asked him to give me three weeks for initial assessment of the organization and to scratch the surface on what kinds of issues were actually going on. I did an assignment where I looked at the organisation in terms of the clarity of its strategy and its goals, and I spoke to all of their senior managers. I reported back to him with a firm diagnosis of demotivation in the workforce. 

Many of the managers were so demotivated because previous management had never involved them in anything, and they never knew how they were performing. If something went wrong there was no recourse. They didn’t know what the goals of the organization were or what the strategy was to deliver those goals. 

As a result, many of the issues the chief executive wanted to respond to, such as poor quality of product, high turnover of staff, conflict, machinery downtime – these were all symptoms of a demotivated workforce, among other issues. We set about involving the right people at all levels, and drawing up a clear strategy in terms of what the chief executive wanted to achieve over a period of time. In addition, we introduced management programmes and weekends away. It was critical to invite all of these people right down to supervisor level to come to these programmes, to get them involved, to show them that they were always going to be part of the solution and that they were the deliverers of our product at the end of the day – the vital cog in our whole operation. 

While building a better unity in the workforce and bringing up their motivation, we also worked on introducing more accountability. We made sure people got job descriptions, that they had a very clear purpose of what their role was. We set it up so they had regular meetings, feedback sessions, and opportunities to grow and learn.

Within 6 months we really started to highlight a lot of things that were root-cause problems, and one of them, unfortunately, hidden in the depths of this, was the fact that there was corruption going on. There was a major issue with a transport contract, and when we changed the contractor, we were able to save the company half a million in just one year. We found similar sorts of issues with various suppliers along the way because there had never been any feedback – people didn’t feel valued and people, unfortunately, took advantage of the situation. 

We tightened the structure up, we revisited all the job descriptions, the accountabilities, the meetings, how people were going to be measured, and instilled quality values across all these issues. Customer complaints were actually dealt with seriously for the first time, as opposed to just being brushed under the carpet. It became quite significant as a change because we realised that now, we no longer lost the good people and kept the bad. We were now in a position where if people weren’t performing we could exit them from the business or train them, and the good people were staying with us now. Before, it was the good ones that were leaving because they couldn’t see where they were going in their future at this company.

So after three and a half years of working together, we took it from about a quarter of a million profit to 4 and a half million net profit. But it was more than that. It was the motivation of the teams, the reduced staff turnover levels, and so many of the business touchpoints like product quality, machinery downtime, absenteeism, conflict – they all just decreased dramatically, and we didn’t directly address any of those things. 

By making people feel valued, and accountable, and having them engaged, they automatically dealt with those things. You didn’t have to deal with absenteeism and investigate why we’ve got it, because it was always a symptom of something else – low morale. With morale going up a lot of the symptoms just disappeared – we didn’t have to treat them, because we were dealing with the causes. 

This example was significant because it had national impact. There were 5 factories involved, and there were a lot of people who had to make changes and work hard at those changes. Some of them obviously left, but of all the senior managers the CEO originally wanted to let go, we only directly removed two of them. It’s about making the decision on the basis of having the right information, the right processes in place, and if things are working in more or less the way you want them, then you can make those decisions. To have a gut reaction on the basis of symptoms is a dangerous thing to do.” 

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