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Managing a global organization adds more responsibilities. Culture, language, laws, and trade agreements all come into play when spreading a business.

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What are your values? Are they the same as your organization's values? And do they align with the business strategy? If you can say "yes" to these 3 questions, then you have a satisfying job at a highly competitive organization. If you answer "no" to one or both questions, however, then you have some critical work to do to improve your organizational culture.

The one thing that all top global employers do is maintain a consistency and quality of employee engagement, according to the Financial Times. "Trying to fit employees worldwide into one cultural straitjacket could seem detrimental," the article states.

"Modern best practice is instead to consider each local adaptation as a potential global policy."

It's the old adage of "think global, act local." Or put it another way, have one global purpose and identity, but allow for geographical differences to build and shape it. Global employees must share the corporate values if they are going to align with them and work to uphold them.

In our recent series of executive interviews focused on cultural transformation, Sanofi - one of the world's most successful pharmaceutical companies, with more than 110,000 people based in more than 100 countries - described its mission to align employees with the corporate purpose. Moving away from separate national divisions, and towards a global organization structured into 5 global business units has been key to this.

"All finance teams now report into one global finance function," explained Isabelle Schneitter Vialet, Sanofi's VP of People and Leadership Development. "The purpose is to bring focus, speed, and specialism into our own products and areas, as well as to increase operational excellence for support functions. We believe that in order to be successful, we need to combine this business strategy with a common identity and culture."

This meant defining a common purpose, ambition, and values. A single global tagline was introduced across the business, as well as a new leadership framework, core competencies, and values.

"We put together a team of millennials and senior leaders, from a mix of geographies and functions, and asked them to draw up these values," Vialet said. "They identified with courage, respect, teamwork, and integrity. But just because you define them doesn't make them real. So we are now in dialogue sessions where people have defined what the values mean to them, to their teams, and to themselves."

The transformation at Sanofi will create a culture and an identity that pulls everyone together. Rather than "erase" the geographic or functional identities, Vialet said, this approach builds on them.

Cultural evolution is about "always making sure to balance that message: what already makes us very special today, what we like, and what we want to build on," she said. "Culture creates the environment where people can perform and be at their best. That, for me, is why it's so important."

This aligns with all the latest research on culture and employee engagement. Companies with strong, positive cultures are now the most in-demand with talented jobseekers.

And as CCL's Bill Pasmore says: "Tapping the collective intelligence of the organization helps the overall change process be faster and more effective - and requires engagement."

It goes back to the 3 questions addressed at the beginning: if corporate values align with the personal values of employees, and both align with the business strategy, then your organization will achieve success. Competitors that fail to do so will fall by the wayside.

Interested in learning more? Explore more insights on driving cultural transformation.

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Creating a Single Culture in a Global Organization

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What are your values? Are they the same as your organization's values? And do they align with the business strategy? If you can say "yes" to these 3 questions, then you have a satisfying job at a highly competitive organization.

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The palm oil industry was the perfect example to why it is important to sustain and take care of raw resources. If the crop isn't being taken care of or sustained, the crop is faster eliminated. The industry is no more.

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TOSS the fruit of the oil palm in your hand-a reddish-orange lozenge not much bigger than a chestnut-and it is difficult to imagine all the trouble it has caused. At Carey Island, an enormous plantation run by Sime Darby, a Malaysian grower, more than a million shady palm trees buttress Kuala Lumpur's outermost sprawl. Workers with telescopic scythes cut down fruit bunches a bit bigger than footballs, which break into pieces on the ground. At an old, clanking mill, where the greasy nuggets are pressed and steam-sterilised, the air smells sweetly of syrup.

Yet Carey Island is the presentable face of an industry which has done a lot of harm. Driven by swiftly-rising demand for vegetable oils (see chart 1), over the past two decades the spread of oil-palm plantations has destroyed swathes of tropical forest, releasing much of their trapped carbon into the atmosphere. Indigenous people have been chased off land they had long occupied, and the migrants brought in to tend the plantations have often suffered appalling working conditions.

In all, palm oil has become symbolic of agriculture's worst excesses. In developing countries it has usually been far cheaper and easier for farmers of all kinds to plough up more virgin forest than to improve the productivity of their existing acreage. Farming has thus faced a more difficult trade-off between growth and the environment than most other industries. However, some of the largest palm-oil companies, stung by their portrayal as environmental villains, have been making efforts to switch to more sustainable ways. In doing so, they may be writing a template for other forms of agriculture.

Palm oil is an essential crop. Most commonly used as a cooking oil, it is also present in everything from chocolate to shampoo. It can be turned into a biofuel, too. In theory it could be good for the environment: you need only a tenth or a quarter as much land to produce a tonne of oil from palm as from other crops, such as soyabeans or sunflowers. However, it thrives only in low-lying tropical areas-particularly in Malaysia and Indonesia, which host nearly 90% of all production. The destruction it has wrought on rainforests and peatlands has horrified environmentalists. Tree-felling and bog-draining has made Indonesia one of the world's biggest contributors to global warming.

Change first took root in 2004 when producers and users of palm oil set up a Roundtable on Sustainable Palm Oil (RSPO), which included some of the NGOs that criticised the industry. The RSPO set new standards of production. For example, it required its members to stop cutting virgin forest, and only to grow or use oil from land to which growers had clear rights. It also introduced a certification scheme for oil which complied with its rules. Its progress has at times been achingly slow, and some environmentalists still think its standards too meek. But the supply of certified palm oil has grown swiftly in recent years, reaching 11m tonnes, or about a fifth of global demand, last year (see chart 2).

The roundtable's work has been accelerated-and, say some, superseded-by campaigners who have taken aim at the giant consumer-goods firms that are the largest buyers of palm oil. In 2010 Greenpeace linked the palm oil in chocolate peddled by Nestlé with the destruction of forests inhabited by the orang-utan. The next year Nestlé's biggest supplier, Golden Agri, became the first of Indonesia's large palm growers to pledge to stop deforesting. With the largest palm-oil consumers, such as Unilever, pledging to seek environmentally sustainable supplies for all their raw materials, Sime Darby has also seized the opportunity and is now the world's largest producer of certified oil.

The watershed was an announcement made in late 2013 by Wilmar, a giant Singaporean trader which handles more than 40% of all globally-traded palm oil. Its trio of promises-no deforestation, no destruction of peatlands, and no exploitation of locals-went some way beyond what the roundtable had required. Wilmar's decision was encouraged by pressure which campaigners had put on its big customers, such as Kellogg. It was also probably hastened by embarrassment over a severe haze which had cloaked South-East Asia that summer, caused by fires resulting from land clearance in Indonesia. Since Wilmar's move a "tsunami" of traders, growers and consumer-goods firms have all made their own promises, says Scott Poynton of the Forest Trust, an environmental consultant. These pledges now cover at least 60% of globally traded palm oil.

Assuming all these companies keep their promises the industry's transformation could be "a model for commodity agriculture globally", reckons Joel Finkelstein of Forest Heroes, a lobby group. Indeed, bodies similar to the RSPO have begun to be set up in other areas of agriculture. But there is disagreement over the lessons to be learned. Adam Harrison of the World Wildlife Fund reckons that the present flurry of pledges might not have happened without the RSPO's years of behind-the-scenes standard-setting. Other campaigners argue that the roundtable's consensus-seeking model slowed progress to the speed of the least enthused.

It may be that the greatest legacy for other agricultural producers will come not from mimicking how the palm-oil industry has reached this inflection-point but in watching how it approaches the tricky problems that remain. Activists who have managed to convince American and European consumers of the palm-oil industry's misdeeds, for example, have so far had less success persuading Indians and Chinese. Therefore, for now, palm-oil firms which supply those enormous markets look much less reformed than their peers that sell to the rich world.

Another looming challenge is to improve productivity among the very small, often family-owned, farms that still produce something like one-third of all palm oil. They may get less than 10 tonnes of palm fruit from each hectare, compared with the industry-wide average of around 20 tonnes and the 27 tonnes that the Carey Island plantation achieves. Sime Darby says the best-performing fields there produce up to 40 tonnes; so there is much scope for meeting rising demand for palm oil without destroying more forests.

Perhaps the most important task, for both campaigners and palm growers, is to wring more assistance from governments in commodity-producing countries, which up to now have played only a modest role in their greening. In Indonesia, the official mapping of land is outdated and inconsistent; as a result its authorities have continued to assign areas of forest for palm cultivation even as less vulnerable land lies ignored. Rules requiring growers to develop their concessions swiftly have sometimes allowed officials to seize back areas which responsible-minded plantation firms had chosen to conserve, or before they had completed negotiations with indigenous people.

Indonesia says it wants to cut its carbon-dioxide emissions by more than a quarter by 2020; since 2011 it has trumpeted a patchily-enforced ban on tree-felling in its thickest jungles. But the government is "nervous" about the newfound conservationism among big palm-oil firms, reckons Krystof Obidzinski of CIFOR, a forestry think-tank. Officials may be worried about how the industry's enthusiasm for greenery will affect the government's plan to boost the economy's sluggish growth rate through a big expansion of the industry, a useful rural employer.

Expanding the industry, though, need not be incompatible with continuing to make it greener. Along with a few other growers, Sime Darby last year asked a team of scientists to come up with a precise definition of which sorts of land should be considered off-limits to growers if the industry is to expand without further frying the planet. Their findings, published in draft form in June, would rule out not just virgin forests but most that have been only partially cleared, as well as "secondary" forests-those which have been cleared but allowed to grow back for 20 years.

That would be a bold step forward: Leela Barrock of Sime Darby says that, if such rules had been in force when the firm began operations a century ago, hardly any of its present plantations would have been permitted. It may also provide a trusty yardstick for many other kinds of crop, among them pulp and paper. But it will not be worth much if only the most enlightened firms abide by it. Better for governments to write such restrictions into national laws. That way, everyone might end up smelling sweet.

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TOSS the fruit of the oil palm in your hand-a reddish-orange lozenge not much bigger than a chestnut-and it is difficult to imagine all the trouble it has caused. At Carey Island, an enormous plantation run by Sime Darby, a Malaysian grower, more than a million shady palm trees buttress Kuala Lumpur's outermost sprawl.

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This chapter highlighted the importance of communicating effectively throughout the entirety of the company. Portraying a positive attitude and not asking open-ended questions helps with effectively communicating in the workplace.

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The title of Karen Friedman's latest book isn't exactly subtle. Shut Up And Say Something: Business Communication Strategies to Overcome Challenges and Influence Listeners lays out her no-nonsense philosophy about how to best get your point across, drawn from her 36 years of experience as a professional communicator. As a TV news reporter, she worked at local stations in cities from Milwaukee to Huntsville, Ala. For the last 16 years, she's headed up Karen Friedman Enterprises, a communication coaching firm in Philadelphia.

How does she apply her ideas in the workplace? Her No. 1 rule, gleaned from two decades in the TV news trenches: "It is absolutely critical to be as direct, to the point and concise as possible," she says, in a lively, forceful voice with a Philadelphia tinge. Vagueness is all too common in the workplace, she observes, and you easily remedy it by following the newscaster's drill of spelling out who, what, where, when and why.
In Pictures: How To Communicate Effectively At Work
"Bosses often say, 'Can you have that report to me? It's really important, and I'd really like to have it,'" Friedman says. A more effective way to deliver that message: "Can you please get that report to me? I'd like it on my desk by 5 p.m. Friday."

Another strategy Friedman draws from newscasting: Hit the headline first. Too many of us are just plain long-winded, she says. "People don't need to know everything we know," she explains. "Think about what the single most important point is that you need to make, the central idea. If your computer died or the fire alarm went off, what would be the one thing they needed to hear?"

Your attitude while talking is also important. "It's not just your words that convey a message," Friedman says. "It's all of you." If you slouch, jam your hands into your pockets, shuffle your feet and avoid eye contact, people will get the impression you don't want to communicate with them. Pry your eyes and thumbs away from your electronic devices, she admonishes. "Pretend that your colleague is your adorable five-year-old who you would drop everything for if she walked into the office," she suggests.

Remember that the world doesn't revolve around you. For Friedman, this was a tough lesson to learn, coming from the ego-driven world of television. If you open yourself to other opinions and perspectives, you'll find it much easier to get your own message across. "Take a poll at your next meeting," she suggests. "Draw the other people out."

Do ask open-ended questions. They can buy time, clarify where another person is coming from and prevent misinterpretation. For instance: "I'm not sure I understand what you're saying, so could you give me an example?"

Friedman is also fond of the bromide that if you can't say something nice, you shouldn't say anything at all. "Don't talk about other people. That identifies you as a gossip and someone who can't be trusted," she advises. You may think you're being entertaining or engendering closeness, but "you meet the same people on the way up as on the way down."

Another Friedman rule: No bull. If you have bad news to deliver, lay it out plainly. It's difficult to talk about layoffs and belt tightening, but if you're in a situation where you have to convey that sort of information, your employees and colleagues likely already know something is up. It is far better to be straight with them than not to communicate at all, even if you can't give them the answers they'd like.

Always deliver bad news in person. It may seem easier to convey negative information via e-mail, but imagine how you'd feel if you learned electronically that your best work friend had been sacked, vs. hearing it from another human being.

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see photosThinkstockClick for full photo gallery: How to Communicate Effectively at Work The title of Karen Friedman's latest book isn't exactly subtle. Shut Up And Say Something: Business Communication Strategies to Overcome Challenges and Influence Listeners lays out her no-nonsense philosophy about how to best get your point across, drawn from [...]

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If Toyota has had multiple recalls and has had to pay billions of dollars in settlements, what does that say for their quality control? The consumer, after repeatedly seeing recalls, will continue to and increasingly doubt the company's quality. Disaster could potentially be in Toyota's future if the issue is not addressed.

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Toyota announced a massive set of recalls Wednesday to address a series of problems, including a faulty cable that could prevent air bags from deploying and a defect that could prevent car seats from remaining in place during an accident.

Toyota, the world's largest automaker, said it is not aware of any crashes, injuries or deaths caused by the problems.

The largest recall involves 3.5 million vehicles equipped with a spiral cable that can be damaged when the steering wheel turns. The frayed cable could cause a warning lamp to illuminate and a car's air bag to deactivate.

Another recall is aimed at repairing seat rails that contain springs that could break, particularly when seats are frequently adjusted. When the springs break, the seat will not lock into place and can move in the event of a crash, increasing the risk of injury, the company said.

A third recall is aimed at fixing steering column brackets installed in certain European and Asian models that can become unstable when the steering wheel is repeatedly turned with maximum force.

The others are to address problematic windshield-wiper motors and the possibility of fires in starter motors. Those problems are confined to models sold in Asia, Toyota has said.

The five recalls cover 6.39 million vehicles worldwide. The air bag problem affects 1.3 million vehicles in the United States. They include the 2009-2010 Corolla, 2009-2010 Matrix, 2008-2010 Highlander, 2009-2010 Tacoma, 2006-2008 RAV4 and 2006-2010 Yaris models.

The recalls come as automakers are under increasing pressure in the United States to move more quickly to correct possible defects and to inform regulators and the public about possible safety problems.

General Motors is under investigation by Congress, federal regulators and federal prosecutors over its slow recall of 2.6 million small cars equipped with faulty ignition switches. The defect, which GM dealers began fixing this week, has been linked by the company to 13 deaths. Company officials acknowledge that GM first learned about the problem at least a decade ago but did not issue a recall - a decision that new chief executive Mary T. Barra has said she is trying to understand through an internal investigation.

Last month, Toyota agreed to pay a $1.2 billion fine to the federal government for misleading consumers and regulators about unintended acceleration in its cars and trucks. The problem, which was traced to problematic floor mats and sticky gas pedals, prompted the company to recall more than 9 million vehicles.

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Toyota recalls 6.4 million vehicles worldwide over air bags, seat rails, steering or wipers

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Toyota announced a massive set of recalls Wednesday to address a series of problems, including a faulty cable that could prevent air bags from deploying and a defect that could prevent car seats from remaining in place during an accident.

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It has always seemed strange to me that men do not want to learn and innovate new ideas with women, especially in the gaming world. People and businesses are beginning to realize the more diversity and ideas from a range of races and genders can ultimately benefit all parties.

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Revenue from esports is expected to surpass $1 billion worldwide by 2018, yet the viewership for esports is only 15 percent female, according to the market research firm SuperData. There is little data on the number of women who actually play esports, but anecdotal evidence suggests the figure may be small.

Efforts to increase diversity in esports go back more than a decade but have started gathering momentum. In 2003, the French esports company Oxent began organizing annual women-only tournaments; 40 teams competed in the 2016 tournament in Paris, an increase of 25 percent over the previous year.

Twitch, the Amazon-owned site that livestreams video game play, began hosting Misscliks, a support community for women in gaming, three years ago after some of its founders became dismayed by the lack of women in esports. Twitch also established Inclusivity City, an area for diversity organizations, at its annual convention, TwitchCon, which ran Sept. 30 to Oct. 2 in San Diego.

And this year, apart from Bandai Namco's efforts, Intel and the esports company ESL partnered to form AnyKey, an advocacy organization that seeks to create support networks and provide opportunities for women in esports.

Many women gamers welcome these efforts. With a predominance of professional male players, the culture of the video game industry has long been perceived as misogynistic. Women in esports have frequently faced heckling from teammates and anonymous threats of rape and murder.

"It's an extremely toxic environment for women," said Stephanie Harvey, 30, who is a top competitor in esports tournaments for the game Counter-Strike: Global Offensive. "To be a woman in esports, you have to have a thick skin."

How effective these efforts will be in drawing more women to esports is uncertain. Although Oxent, which has run the Electronic Sports World Convention for 13 years, has organized women-only tournaments for years for Counter-Strike, there is little evidence that they are encouraging more women to play competitively. Some gamers think the events reinforce the idea that women are not capable of competing with men.

Lâm Hua, the head of content at Oxent, said the women-only tournaments were not entirely successful in drawing more women to esports, but after much debate, the company decided that they were "the first step in the grand scheme of women recognition in the sport." For now, he said, they were "a necessary evil."

Other diversity efforts in esports have focused on normalizing the idea of women in gaming. Anna Prosser Robinson, a programming manager and onscreen personality at Twitch, helped push the company's diversity initiatives after seeing women rise up, then drop out of esports.

"We would see these awesome, compelling women be excited" about esports, she said. "Six months later, they would be gone." The goal of Misscliks, she said, was to provide support and resources to encourage those women to create a network on Twitch and stay in esports.

Ms. Prosser Robinson also helped bring diversity to TwitchCon this year with Inclusivity City, a physical space on the convention floor that hosted several diversity organizations like AnyKey and Hack Harassment, as well as a Smash Sisters tournament for women who play Nintendo's Super Smash Bros. fighting games.

"Inclusivity is a core value of our brand," Chase, a Twitch spokesman who goes by one name, said of the diversity effort at the convention. "It was a success this year and definitely something we could consider for next year."

AnyKey, the creation of Intel and ESL to increase the number of women in esports, focuses on two areas. One is research and discussion of the diversity issue, headed by T. L. Taylor, a professor at the Massachusetts Institute of Technology, and the other is initiatives and solutions, led by Morgan Romine, a former esports player.

AnyKey organized a women-only esports tournament in March at one of the industry's largest events, the Intel Extreme Masters competition in Katowice, Poland. Ms. Romine said she saw women-only tournaments as a way to strengthen players' skills and move them into open competition.

"There is a lot of work that needs to be done, giving more women confidence and experience in that space," she said.

Mr. Religioso of Bandai Namco said he began noticing the lack of female esports players at regional esports tournaments last spring, like Final Round in Atlanta and Combo Breaker in Chicago.

With the growth in esports, he saw an opportunity to reinvigorate interest in the company's Tekken franchise. Next year, Bandai Namco will release Tekken 7, a one-on-one fighting game that the company hopes will be popular among esports competitors. Women make up about 23 percent of the fan base for the Tekken fighting games, Mr. Religioso said, but few are playing them competitively.

Rather than segregate men and women, Mr. Religioso wants them to work together in the "Bonnie and Clyde" tournaments. He also wants to introduce Western audiences to the Tekken Girl's Club, a mentorship program in Japan in which professional players teach women to master the game's mechanics.

Another solution to encourage more women into esports would be to change the way video games are made and marketed. Stephanie Llamas, director of research and insight at SuperData, said women should be participating more on the business side of the industry and developing games with women in mind.

"It's difficult to understand the demographic if you are not part of that demographic," she said.

Correction: December 23, 2016

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Esports Sees Profit in Attracting Female Gamers

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Revenue from esports is expected to surpass $1 billion worldwide by 2018, yet the viewership for esports is only 15 percent female, according to the market research firm SuperData. There is little data on the number of women who actually play esports, but anecdotal evidence suggests the figure may be small.

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Although formal groups or teams can be given or assigned within a workplace, informal groups are often formed between employees. Informal teams can be driven by common interests of the company's members.

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Enterprise gave perfect insight into how a company recruits and promotes employees within the company, rather than using an outside source. From the beginning, employees are aware and find motivation in working towards reaching the next goal.

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Whether male or female, having diverse gender and races offer variations in the work place that are needed to succeed for longer. Having personally had all female managers, I have seen how lack of diversity can hurt a business.

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Lean Six Sigma Organization Structure emphasizes and works only with a collaborative team effort.The structure first came to use in the 1990's in the manufacturing industry.

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With so many companies now becoming global organizations, it is important to make sure trade agreements are being followed. The WTO is responsible for 97% of the world trade.

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Sometimes reporting wrongdoings within the workplace can be intimidating. The repercussions could not be worth it. I was not aware before the class the NWC was around to protect people doing the right thing.

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'dodd frank' 'elephant poaching' 'rhino horn trade'

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The National Whistleblower Center is the leading NGO in the field of whistleblower law. It has worked to protect and incentivize whistleblowers for over 30 years. NWC supports whistleblowers through campaigns advocating for whistleblower protections, urging federal government agencies to establish robust whistleblower programs; and provides legal advocacy tools and a completely secure and confidential online reporting platform that connects whistleblowers with a nationwide network of attorneys specializing in whistleblower law.

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Making decisions, especially for the future of a company, can be intimidating. However investigating the situation and exploring your options are some of the many steps towards helping with tough decision making.

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Communicate your decision, and take action.

Let's look at each of these steps in detail. Each step features a list of related Mind Tools resources to help you further.

Step 1: Investigate the Situation in Detail

Decisions often fail because key factors are missed or ignored from the outset. So, before you can begin to make a decision, you need to fully understand your situation.

Start by considering the decision in the context of the problem it is intended to address. You need to determine whether the stated problem is the real issue, or just a symptom of something deeper.

Look beyond the obvious. It may be that your objective can be approached in isolation, but it's more likely that there are a number of interrelated factors to consider. Changes made in one department, for example, could have knock-on effects elsewhere, making the change counterproductive.

Step 2: Create a Constructive Environment for Your Decision

Can you give your decision the attention it needs? Spend some time preparing yourself before diving in to the facts and figures.

Remember that most decisions will affect other people too, so it helps to create a constructive environment in which to explore the situation together and gain support.

This is especially true when you have to rely on other people to implement a decision that you're responsible for. You'll need to identify who to include in the process and who will be part of any final decision-making group, which will ideally comprise just five to seven people.

Enable people to contribute to the discussions without any fear of the other participants rejecting them and their ideas. Make sure that everyone recognizes that the objective is to make the best decision possible in the circumstances, without blame.

Step 3: Generate Good Alternatives to Decide Between

The wider the options you explore, the better your final decision is likely to be. Generating a number of different options may seem to make your decision more complicated at first, but the act of coming up with alternatives forces you to dig deeper and to look at the problem from different angles.

This is when it can be helpful to employ a variety of creative thinking techniques. These can help you to step outside your normal patterns of thinking and come up with some truly innovative solutions.

Brainstorming is probably the most popular method of generating ideas, but for more tips on how to examine your situation from new perspectives, and how to organize ideas into manageable themes and groups, see the Mind Tools resources in the box, below.

Step 4: Explore Your Options

When you're satisfied that you have a good selection of realistic alternatives, it's time to evaluate the feasibility, risks and implications of each one.

Almost every decision involves some degree of risk. You'll need a structured approach for assessing threats and evaluating the probability of adverse events occurring - and what they might cost to manage. You'll also want to examine the ethical impact of each option, and how that might sit with your personal and organizational values.

The resources highlighted below offer tried-and-true models to help you.

Step 5: Select the Best Solution

Once you've evaluated the alternatives, the next step is to make your decision!

If you have various criteria to consider, use Decision Matrix Analysis to compare them reliably and rigorously. Or, if you want to determine which ones should carry most weight in your decision, conduct a Paired Comparison Analysis.

If your decision is being made within a group, techniques such as multi-voting and the Modified Borda Count can help your team reach an agreement.

When anonymity is important, decision-makers dislike one another, or there is a tendency for certain individuals to dominate the process, use the Delphi Technique to reach a fair and impartial decision. This uses cycles of anonymous, written discussion and argument, managed by a facilitator. Participants do not meet, and sometimes they don't even know who else is involved.

If you're working with an established team, Hartnett's Consensus-Oriented Decision-Making Model is useful for encouraging everyone to participate in making the decision. Or, if you're working with several different teams, or a particularly large group, assign responsibility for each stage of the decision-making process with Bain's RAPID Framework, so that everyone understands their responsibilities and any potential in-fighting can be avoided.

Step 6: Evaluate Your Plan

After all the effort and hard work you've invested in evaluating and selecting alternatives, it can be tempting to forge ahead at this stage. But now, more than ever, is the time to "sense check" your decision. After all, hindsight is great for identifying why things have gone wrong, but it's far better to prevent mistakes from happening in the first place!

Before you start to implement your decision, take a long, dispassionate look at it to be sure that you have been thorough, and that common errors haven't crept into the process.

Your final decision is only as good as the facts and research you used to make it. Make sure that your information is trustworthy, and that you've done your best not to "cherry pick" data. This will help you avoid confirmation bias, a common psychological bias in decision making.

Discuss your preliminary conclusions with important stakeholders to enable them to spot flaws, make recommendations, and support your conclusions. Listen to your own intuition, too, and quietly and methodically test assumptions and decisions against your own experience. BRAIN BRAN BRAND is a useful tool for this. If you have any doubts, examine them thoroughly to work out what's troubling you.

Use Blindspot Analysis to review whether you've fallen prey to problems like over-confidence, escalating commitment, or groupthink. And consider checking the logical structure of your process with the Ladder of Inference, to make sure that a well-founded and consistent decision emerges at the end.

Step 7: Communicate Your Decision, and Take Action

Once you've made your decision, you need to communicate it to everyone affected by it in an engaging, informative and inspiring way.

Get them involved in implementing the solution by discussing how and why you arrived at your decision. The more information you provide about risks and projected benefits, the more likely people will be to support it.

If people point out a flaw in your process as a result, have the humility to welcome their input and review your plans appropriately - it's much better to do this now, cheaply, than having to do it expensively (and embarrassingly) if your plans have failed.

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How to Make Decisions - A Model for Making the Best Possible Choices

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Communicate your decision, and take action. Let's look at each of these steps in detail. Each step features a list of related Mind Tools resources to help you further. Decisions often fail because key factors are missed or ignored from the outset. So, before you can begin to make a decision, you need to fully understand your situation.

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Adkins story was my first manager lesson in this class.

Although Adkins’s dedicated his life to adapting and learning new things within his company, he was not learning the correct sills for management.

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By using the SWOT technique, one is able to weigh the pros and cons of expanding a business. In the case of In-N-Out, I found it would be more beneficial expanding the restaurant east.

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Marriott has been able to become the biggest hotel chain by sticking to the same values they always have. Taking careful consideration into their employees creates a positive work environment for everyone.

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Several of the best-known names in travel are now united in one hotel company.

Marriott International closed Friday morning on its $13 billion acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz Carlton brands with Starwood's Sheraton, Westin, W and St. Regis properties.

In total, 30 hotel brands now fall under the Marriott umbrella to create the largest hotel chain in the world with more than 5,800 properties and 1.1 million rooms in more than 110 countries. That's more than 1 out of every 15 hotel rooms around the globe.

Marriott now eclipses Hilton Worldwide's 773,000 rooms and the 766,000 that are part of the Intercontinental Hotels Group family, according to STR, a firm that tracks hotel data.

"We've got an ability to offer just that much more choice. A choice in locations, a choice in the kind of hotel, a choice in the amount a customer needs to spend," Marriott CEO Arne Sorenson told The Associated Press in an interview Thursday.

Starwood's guest loyalty program - Starwood Preferred Guest - was also a "central, strategic rationale for the transaction," Sorenson said. The program's members are deeply loyal to it, have generally higher incomes and tend to spend many nights on the road.

Starting Friday, members of Starwood and Marriott's two loyalty programs will be able to link their accounts together. Gold elite members in one program will get gold status in the other. Platinum elite members will get platinum in the other. Marriott silver members will see Starwood's lowest category, Preferred Plus.

Each Starwood point will be worth three Marriott Rewards points.

Starwood put itself up for sale in April 2015. The Stamford, Connecticut, company had struggled to grow as fast as its rivals, particularly in "limited service hotels," which are smaller properties which don't have restaurants or banquet halls. They are often located on the side of the highway, near airports or in suburban office parks.

To get Starwood, Marriott had to outbid China's Anbang Insurance Group. U.S. and European anti-trust regulators were quick to approve the sale but the Chinese government hesitated, delaying the sale by months.

"We may have been a little too optimistic about how fast we could get this thing closed," Sorenson said Thursday.

Marriott and Starwood - like other hotel chains - own very few individual hotels. Instead they manage or franchise their brands to hundreds of individual owners, often real estate development companies. Those individual hotel owners are responsible for setting nightly room rates. It isn't uncommon for a developer to own a Marriott, Hilton, Hyatt and Sheraton in the same city.

The purchase gives Marriott more leverage with corporate travel departments who often look for one giant chain to house all of their employees. It also gives Marriott more power over Expedia and Priceline, the two giant online travel agencies that sell rooms on behalf of hotel companies in exchange for a commission. The hotel industry has spent the last year trying to get travelers to book directly with them instead of the travel agencies to avoid paying those fees.

There are still many details to work out.

Marriott has thrived as an "asset light" company, owning a handful of hotels. Starwood has been selling off properties, while singing long-term management agreements for those same hotels. As of June 30, it still owned 23 properties. Sorenson said he believes there is a strong market to continue selling off many of those iconic hotels.

"There is always a market for the St. Regis in New York," he said, adding that other assets in the portfolio have comparable stature. "In great global cities, real estate like that always has a value."

The new company will keep Marriott's Bethesda, Maryland headquarters but hasn't announced if it will keep any presence at Starwood's Connecticut or New York offices.

Then there are the 30 brands. Some have performed better than others but Sorenson said all of them will probably survive the merger.

"I think so. Every one of them has hotels in them," he noted.

For now, Starwood and Marriott will keep separate loyalty programs. Starwood has a credit card deal with American Express as well as close partnerships with Delta Air Lines and Uber. Marriott has a much larger program with partnerships with Chase and United Airlines.

"Nothing changes immediately. We have to see how those partnerships evolve," Sorenson said.

Gary Leff, who writes about points and miles at ViewFromTheWing.com, called the three-to-one exchange rate of Starwood points to Marriott points "just right."

"It's one of the many reasonable and positive steps that Marriott has taken along the way as it acquires Starwood," Leff said. "But there's a whole lot still to happen between now and the programs actually being combined."

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Marriott buys Starwood, becoming world's largest hotel chain

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Several of the best-known names in travel are now united in one hotel company. Marriott International closed Friday morning on its $13 billion acquisition of Starwood Hotels & Resorts Worldwide, bringing together its Marriott, Courtyard and Ritz Carlton brands with Starwood's Sheraton, Westin, W and St. Regis properties.

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Because of the many leadership styles managers use, models like the situational leadership model and life cycle theory of leadership define specific style types. Depending on the industry and person, task and relationship ratings can vary.

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The survey I created asks a variety of work environment questions. With an emphasis on asking questions related to stress, meaning in their work, and level of comfort, the survey provides insight

and data into how the company’s employee feel towards their work.

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Assigning and delegating specific authorities and responsibilities helps organizations with giving employees and subordinates specific tasks to be done. Clear direction is important to give within a company.

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Having a specific formal organization structure has proven to be effective only when enforced and the goals are attainable. Employees sometimes rely on informal structures when the business puts forth a poor or difficult structure or expectation.

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Before this module, I was one of the people under the impression the Human Resource department only worked for the well-being of the people working. However, HR will always look out for the well-being of the company as a whole.

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Although similar the responsibilities of a leader and manager are different. Leaders motivate and influence whereas managers control variables to achieve goals.

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“Organizational culture is the sum of values and rituals which serve as ‘glue’ to integrate the members of the organization.” — Richard Perrin. Each organization has its own set of unique cultures.

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If you want to provoke a vigorous debate, start a conversation on organizational culture. While there is universal agreement that (1) it exists, and (2) that it plays a crucial role in shaping behavior in organizations, there is little consensus on what organizational culture actually is, never mind how it influences behavior and whether it is something leaders can change.

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What Is Organizational Culture? And Why Should We Care?

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What leaders need to know to change orgs for the better.

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CEO of Zappos, Tony Hsieh focused on creating more of a cohesive, family environment. For example, emphasizing the importance of employees creating ideas and sharing them.

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By using in-house recruiting, a company is getting employees already trained within the company and saving money. On some occasions, it would be beneficial to use executive search when looking for top level positions.

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A recent article in Bloomberg Businessweek is creating quite a buzz around the human capital industry. The piece, "Executive Headhunters Squeezed by In-House Recruiters," uses a patchwork of anecdotes and piecemeal data to make the case that retained search firms are facing new difficulties.

With all due respect to Bloomberg, the realities they outline are neither new, nor are they really difficulties in providing value added retained executive search services.

First, let's briefly discuss the problems with their data, which the Association of Executive Search Consultants already questioned. Businessweek appears to have chosen arbitrary data points which happen to paint a picture that retained executive search firms are suffering. Sure, a 33 percent decline in industry revenue in 2009 looks ominous; if you omit that the decline was from an all-time high; and if you omit that revenue is already re-approaching that all-time high. (There was also a minor world-wide economic event in 2008 that Businessweek may recall.)

As the AESC states:
"Although in-house search is inevitably eating into the lower end of the market by taking work that previously might have gone to some executive search firms, nevertheless, the overall market for executive search services is holding firm. Once global economic conditions stabilize, we expect to see even greater demand in response to the worldwide talent shortage-a shortage being driven by underlying demographic shifts in the developed economies and huge potential demand for executive talent from the emerging markets."
Or, in summary, "The impression given in the article that the retained executive search profession is in decline is not substantiated by the facts."

Businessweek seems mostly concerned with the impact of in-housing on the short-term bottom lines of both hiring companies and retained search firms. To evaluate the merits of retained search services, and not just the costs, one would have to complete a true return on investment calculation, which includes critical factors such as the impact on bringing the best talent in the market to the organization in the shortest time period possible, while minimizing the time and energy of key existing client executives. In addition, the extent by which true executive recruiting is done in-house is not put into context. There has been and always will be organizations which maintain and build internal executive recruiting teams. However, most of these limited numbers of organizations also continue to use some level of external support.

If they had contacted us and asked the right questions - or had done the same with any of our brethren in the retained search industry - they would have heard a polite and convincing case for hiring an executive search firm and not diverting internal resources.

A key point of added value we bring to executive search over in-house recruiters is, simply, that we're not in-house. We're impartial and data-driven. We come to the hiring process with fresh eyes and perspective.

Secondly, this is what we do. This is all we do and we're focused on it. We have in-depth research capabilities and access to a wealth of human capital across dozens of industries. We have a broader view of the marketplace and a wide reach. The Businessweek article says that Coca-Cola does 95 percent of their searches in-house. We're willing to bet the other 5 percent are their high-level and/or most specific searches. They're not going to try to find their own CEO for the same reason we don't try to make our own Diet Coke - the result would leave a bad taste.

After all, when it comes to something vital, you want to hire an expert.

In a similar vein, the article also states that GE's in-house executive search team was able to beat the retained search industry standard of 170 days to staff positions in 73 days. That's impressive. That's also about our average here at Morgan Samuels.

And conceptually, the article seems to argue against itself. It's difficult to make the case that the services provided by firms like Morgan Samuels are superfluous in an article that outlines how major corporations are hiring away our very-talented professionals in an effort to improve their performance and bottom line. That is, after all, our specialty. It's the whole idea. And imitation is the sincerest form of flattery.

Lastly, a firm such as Morgan Samuels that truly provides highly differentiated services within the retained search category is facing a robust market. There will always be a market for a firm that can be a strategic partner to clients, without being an insider, appropriately assesses leadership acumen and cultural fit, all the while scouring the marketplace for the best talent to meet our client's key business objectives. All of this is done with an average cycle time of 76 days, a 34% diversity placement ratio, and an average candidate review before offer of four. Oh, and by the way, of the 4, 20% of our clients will try to hire two of the four. So value like this is hard to duplicate and, frankly, from an economic standpoint, why would you?

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Retained Executive Search vs. In-House Recruiting

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A recent article in Bloomberg Businessweek is creating quite a buzz around the human capital industry. The piece, "Executive Headhunters Squeezed by In-House Recruiters," uses a patchwork of anecdotes and piecemeal data to make the case that retained search firms are facing new difficulties.

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Steps involved in problem solving include investigating and analyzing the problem, identifying a solution, generating alternative solutions, implementing plans and following up on the solution.

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It is hard to imagine how Apotheker, former CEO of HP, did not see his lack of leadership. Because Apotheker did not meet productivity numbers, and scored lowly among employee opinions, he met his demise with HP.

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Meg Whitman (left) will replace Leo Apotheker as Hewlett-Packard's CEO.

NEW YORK (CNNMoney) -- Hewlett-Packard's board on Thursday ousted CEO Leo Apotheker after just 11 months on the job, replacing him with Meg Whitman.

"I am honored and excited to lead HP," Whitman said in a prepared statement. "I believe HP matters -- it matters to Silicon Valley, California, the country and the world."

HP's board said the company needed a change at the top. The company cut its financial outlook three times in Apotheker's tenure, and on Thursday, HP said it was not confident it would be able to meet its sales targets for the current quarter.

Shareholders sent the stock down more than 40% this year before Fortune and other outlets broke the news this week that the board was considering letting Apotheker go.

"We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead," said Ray Lane, who on Thursday was named executive chairman of HP's board.

Lane was formerly an independent, non-executive chair. The company said it will look for someone to fill that independent role on its board.

The chairman said on a conference call Thursday that the board considered many candidates and decided together that Whitman was the right fit.

"I can't think of a name out there I would select as CEO over Meg," said Lane.

As the former head of European software giant SAP (), Apotheker was a curious choice to lead HP (, Fortune 500) -- the largest U.S. technology company by sales -- since it is predominantly a hardware company. HP's software business makes up around 2% of the company's annual revenue, which hit $125 billion last year.

Apotheker stuck to what he knows best and decided to refocus HP on higher-margin businesses like cloud computing and software. He was particularly bullish on HP's acquisition of Palm, which was made prior to his arrival at the company. He planned to let Palm's webOS software permeate the company's various hardware lines, including PCs, phones and the much-publicized TouchPad tablet.

But the TouchPad was a failure, HP's phones weren't selling, and PC sales slumped globally. Last month, Apotheker announced yet another hard left turn: He opted to end the webOS experiment and said HP would get out of the PC business entirely -- a market that it leads both in the United States and globally.

The problem with Apotheker wasn't lack of vision as much as a lack of execution and communication, Lane said.

Whitman said Thursday that the company under her leadership would stay the course and continue to transition to an enterprise software business.

"The only thing we can do to regain investors' and customers' confidence is to execute, and that's what I intend to do," she said.

The ousting of its third straight CEO marks yet another dramatic crisis in a decade of turmoil for one of Silicon Valley's original pioneers. A year earlier, Mark Hurd was fired as HP's CEO after submitting false expense reports in what appeared to be an effort to conceal a relationship with a former employee.

In 2006, HP's chairwoman Pattie Dunn was shown the door after it was revealed that she had spearheaded a secret probe to spy on fellow board members and journalists, in an attempt to find the source of board-level media leaks.

A year before that, in 2005, then-CEO Carly Fiorina was booted out (she technically resigned, but, the move wasn't especially voluntary) after spearheading HP's the failed merger with Compaq. The company's stock price was cut in half during her tenure.

The CEO revolving door has cost the company more than $83 million in severance pay, including more than $25 million that will be owed to Apotheker.

Fending off criticism from analysts that the board is dysfunctional, Lane argued that the board is very different than the ones of the past, comprised of 8 new directors since the company ousted Hurd.

"I tell you this right from my heart," he said. "That's not this board. They work really well together."

Whitman, who is also an HP board member, was formerly the CEO of eBay (, Fortune 500). She headed the online auction site for 10 years, taking over the company in 1998 when it was in its infancy. By the time she left in 2008, the company had grown to an $8.5 billion e-commerce behemoth.

She was the Republican nominee in the 2010 California gubernatorial race, spending much of her fortune in her unsuccessful campaign. She then resurfaced several months later, when she was named to HP's board in January.

Lane, HP's chairman, praised Whitman, saying her experience gives her the right set of skills to steer HP back on course.

"Meg is a technology visionary with a proven track record of execution," he said. "She is a strong communicator who is customer focused with deep leadership capabilities. Furthermore, as a member of HP's board of directors for the past eight months, Meg has a solid understanding of our products and markets."

Still, many analysts were scratching their heads about the choice.

"I'm not really convinced she's the best fit -- HP needs to regain the confidence of its enterprise customers, and her expertise resides in the consumer retail market," said Ron Gruia, principal consultant at Frost & Sullivan.

"She's on the board, so she's a logical interim choice, but not a person who's going to be driver for HP as it transitions to a software and services kind of model," Gruia added.

Some believe that HP is making a fatal decision.

"As if HP didn't make a mistake on bringing in Leo Apotheker, now they are making an even bigger mistake by bringing in Meg Whitman, someone with very little experience in the core areas of HP," said Vanessa Alvarez, analyst at Forrester Research.

"This is plain carelessness by the board of directors, and quite frankly, hammering the last nail in the coffin for HP. Its leadership is in the gutter. I'm appalled," she added.

But other analysts believe Whitman is capable of doing the job, albeit a very difficult one.

"She's a great communicator; a great marketer; and, an excellent manager, but she'll need to put a strategic stamp on HP," said Joel Achramowicz, senior vice president of research at Blaylock Robert Van.

"There are even more questions and concerns regarding HP exigent from both the Street and from customers. She'll have to work expediently."

First Published: September 22, 2011: 4:08 PM ET

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HP CEO Apotheker fired, replaced by Meg Whitman

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Meg Whitman (left) will replace Leo Apotheker as Hewlett-Packard's CEO. NEW YORK (CNNMoney) -- Hewlett-Packard's board on Thursday ousted CEO Leo Apotheker after just 11 months on the job, replacing him with Meg Whitman. "I am honored and excited to lead HP," Whitman said in a prepared statement.

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In simple terms, productivity equals the unit of outputs divided by the unit of inputs. HBR defines it as, "The company producing more with a given set of inputs (capital, labor, and materials) or using fewer inputs to produce the same output has an advantage over the company producing less."

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The Idea in Brief

"Whoever came up with this has no idea what my business is like." This is the common lament of managers confronted with overly complicated models for measuring productivity. Some productivity indexes boast technical elegance and statistical precision-but have little to do with daily management decision making, or even, for that matter, the bottom line. What you need is enough good information to enable you to determine how well your company is taking a pile of raw materials, a bunch of machines, stacks of paperwork, and groups of employees, and turning out useful goods or services.

Fortunately, you don't need to get a Ph.D. in order to learn how to obtain solid, meaningful productivity measurements. As long as you stay mindful of how the perfect can get in the way of the good, a few basic guidelines can help you design a system that meets your needs.

The Idea in Practice

What is productivity anyway? It's not about wages-in fact, it's not about any specific set of costs. Rather, productivity is output divided by input. So the job of productivity measurement is to highlight how to get more units of output (goods produced or services rendered) for each unit of input (materials, labor hours, machine time) than your competitors are able to deliver.

What's important to realize here is that labor is only one element in productivity measurement. One U.S. plant manager discovered that nearly 40% of his company's productivity-improvement budget was allocated to upgrading direct labor efficiency-even though direct labor accounted for only 10% of manufacturing costs. Effective productivity measurement, therefore, takes a multifactor perspective: it identifies the contribution of each factor in production, and then combines the factors to create an understanding of productivity trends.

But don't sacrifice function for form. Keep your measurement system simple-not because people are stupid, but because they need an intuitive grasp of a measurement in order for it to affect their decisions and priorities. Then, too, the effort required to get a slightly more precise measurement may not be worth it.

A few additional guidelines:

Include time in what you measure. Because time isn't purchased, it's often ignored in productivity analysis. But the competitive power of shorter production cycles is clear.

Find ways to measure white-collar productivity. The guy who tightens bolts on the assembly line makes an obvious contribution to the product. But how do you measure what you get from, say, the product designers? One plant manager found that the bigger and smarter his engineering team, the better the company's materials productivity.

Compare apples to apples. For the insights to be relevant, comparisons between departments or companies must be made appropriately. And productivity measures that influence such things as people's compensation must be accurate and fair.

Interpret trends. Plant A may seem to have better productivity than Plant B, but if Plant B is improving and Plant A's trend lines are headed south, the situation deserves a second look.

A few years ago, a major manufacturing-based conglomerate asked a gifted mathematician to join its corporate staff. One of his first assignments was to design a system that senior managers could use to evaluate the operating efficiency of the company's various divisions. He devoted many months to the assignment and also tapped the knowledge of several academic experts. The result was a truly sophisticated model that combined historical performance data with economic forecasts to set target productivity levels for each business unit.

Much to management's dismay, however, when the results were in, the model suggested that not one unit was performing up to snuff. So headquarters asked the obvious question-Why? Why was an organization that was generating handsome profits and cash flows showing such disappointing productivity? The expert could not answer the question, nor was his model designed to do so. Not surprisingly, executives saw little value in the new system and scrapped it.

It's essential to measure productivity appropriately. Many companies that want to raise their competitiveness are investing a lot of money and faith in methods to track their plants' and offices' efficiency. Staff specialists or outside consultants-experts in cost accounting, statistics, and economics-usually play an important role in designing these systems. But specialists are often trained to focus on the technical elegance and statistical accuracy of productivity indexes. All too often, they introduce methods that are very precise but ignore the real challenges managers face.

While collecting information on productivity measurement systems and interviewing managers at plants across the United States during the last several years, I have seen many examples of effective productivity measurement-systems that have led to big strides in operating efficiency. But more frequently I have encountered frustration and confusion. A manager will look at a productivity index developed by a specialist and say, "Whoever came up with this has no idea what my business is like."

Productivity measurement is simply too important to be delegated to productivity specialists. But managers don't have to become experts themselves to ensure that existing systems meet their needs-or that new systems are relevant. A set of practical guidelines can help them understand, evaluate, and apply productivity measurement techniques effectively.

Look Beyond Direct Labor

What is productivity? Remarkably, many people who make decisions every day about improving plant efficiency don't know how to answer this simple question. Let's begin with what productivity is not.

Productivity is not about wages. High wages can present a problem, not because workers are paid too much but because they produce too little. In deciding how best to measure productivity, managers should focus not on dollars per hour but on labor dollars per product. That is, on labor content, not labor cost. Workers who are very productive can be paid thousands of dollars more than employees elsewhere and the business can still prosper, as manufacturers like Lincoln Electric have demonstrated.

Productivity measurement should focus on overall capabilities, not on one set of costs. How good is your company at taking a pile of raw materials, a bunch of machines, stacks of paperwork, and groups of employees, and turning out useful goods or services? That's what a productivity index should address. It is, as much as possible, a relationship between physical inputs and outputs. The formula is disarmingly simple.

Productivity Formula

The company producing more with a given set of inputs (capital, labor, and materials) or using fewer inputs to produce the same output has an advantage over the company producing less. Lower input costs create an added advantage-but not the principal advantage that productivity measures must identify. The central mission of a productivity index is to illuminate how a business can get more units of output per labor hour, per machine, or per pound of materials than its competitors.

Still, much of U.S. industry remains preoccupied with direct labor. At the national level, productivity figures do mean labor productivity. The Bureau of Labor Statistics, the primary source of productivity information, logically enough focuses on labor productivity. Cost accounting also reinforces this bias. The allocation of overhead, for example, is often based exclusively on labor hours. This approach may have been reasonable when labor hours represented a large percentage of total costs, but today, for many businesses, labor is a minor cost element. Or the bias may simply come from too many years when managing operations meant "kicking butts and taking names." If persuading people to work harder is all there is to efficiency, then stressing labor productivity makes sense.

But there is much more to productivity, and many companies miss opportunities to bolster efficiency in nonlabor areas. Consider one U.S. plant manager's experience at a company with extensive fabrication and assembly operations. For a long time, he was uncomfortable with the way his division was allocating its annual $2 million productivity improvement budget. On being promoted to run all the division's plants, he at once reviewed spending on productivity programs. His intuition proved correct, as Exhibit I illustrates. Although direct labor accounted for only 10% of manufacturing costs, nearly 40% of the productivity budget was allocated to upgrading direct-labor efficiency. His subordinates are now looking for ways to reduce overhead and make better use of technology.

Exhibit I How One Company Didn't Match Productivity Improvement Spending to Production Costs

Single-minded attention to direct labor can produce unexpected consequences. Several years ago, a big New York bank concerned about labor costs in its back office implemented a department-by-department system to measure productivity, defined as transactions per employee. Senior management gave high visibility to the new system and even used it to calculate a large portion of the bonuses it paid to line managers. So the line managers computerized everything in sight. The result was increased productivity in every department but one-data processing. While staff was shrinking in the rest of the bank, data processing came under incredible pressure. It boosted its staff as well as its spending on hardware and software.

If that expansion in overhead was best for the bank, executives could never say for sure; their measurement system focused only on the productivity of direct labor. It didn't analyze the trade-offs between the productivity of departments (shorter turnaround times on letters of credit vs. growth in the data processing head count) or between cuts in variable costs (labor) and higher capital spending (new computers).

Take a Multifactor Perspective

The trouble with single-factor productivity measures (whether output per labor hour, output per machine, or output per ton of material) is that it is easy to increase the productivity of one factor by replacing it with another. Labor, capital, and materials are all potential substitutes for each other. Effective productivity measurement requires the development of an index that identifies the contribution of each factor of production and then tracks and combines them.

Take a hypothetical plant that machines purchased castings as one step in its production of motors. Now the company decides to purchase this component premachined. The premachined parts cost 20% more than standard castings, but buying them allows the company to lay off skilled workers and sell its machine tools. What happens to productivity? Output has remained constant, but the number of workers has fallen, so labor productivity is up. So too is capital productivity, by virtue of the lower asset base. But materials productivity has declined by 20% since output is unchanged, while the value of purchased materials has gone up.

In such a situation, a productivity index that focuses only on labor or capital would create strong incentives to reduce the value added by operations, which may not at all be management's goal. In theory, a company's make vs. buy decision process should prevent such unintended results. But with top management pushing hard for identifiable productivity increases, there is a real risk that defining productivity too narrowly will lead to unsound decisions by subordinates.

A multifactor view of productivity is important, therefore, but it is difficult for one index to encompass all inputs. Using several different single-factor measures can also yield a multifactor perspective. Indeed, even if a plant uses one aggregate measure, it still makes sense to use single-factor measures because they help identify the sources of aggregate productivity trends. A big change in a multifactor productivity measurement raises obvious questions: Is the change due to simultaneous shifts in the productivity of labor, capital, and materials, or has only one dimension changed?

Don't Sacrifice Function for Form

A multifactor index to track productivity gives managers a convenient scorecard to answer the question, "How are we doing?" But an index can play this role only if managers and workers understand it, which may require certain compromises in mathematical elegance and accuracy. Economists and productivity specialists like to use sophisticated functional forms when they combine labor, materials, and capital into one index. Rather than simply adding everything up or averaging inputs, they prefer logarithmic and multiplicative techniques. When the chief goal is to study productivity behavior, as in statistical research, these approaches have theoretical advantages. But when the primary goal is to influence behavior, the simpler the better must be the rule If the people who use an index can't understand it at a gut level, it probably will not affect their decisions and priorities.

Within Northern Telecom, some divisions make sure managers and workers understand multifactor productivity by including them in the design of department-specific indexes and by keeping the indexes simple. A department develops several performance ratios (no fewer than three, no more than seven) that it believes capture the essence of its mission. For example, one design engineering team proposes six ratios, among which are: reworked drawings as a percentage of total drawings, overdue drawings as a percentage of total drawings, and overtime hours as a percentage of total hours. Next the department identifies current performance, long-term goals, and interim goals for each ratio. Finally, managers assign weights to the ratios to reflect their relative importance, with the sum totaling 100. Thus the index produces a single productivity "score" (a weighted average of the ratios) that measures progress towards agreed-on goals in a way that everyone can understand.

This approach is not analytically perfect; there is no statistical reason to limit the number of ratios to seven, for example, and the weighting scheme is undeniably subjective. But Northern Telecom follows a basic principle that many other companies fail to appreciate: when deciding whether you need greater measurement precision, ask first whether greater precision will make a real difference in subsequent actions to improve productivity. Executives should seek the measure that promises the greatest impact, not the measure boasting the greatest accuracy or technical elegance.

The same principle applies to data collection. There are real costs associated with developing and implementing elaborate productivity systems. My research suggests that the point comes-sometimes very early on-where increased accuracy is not worth additional cost. For example, the mismatch between the information provided by some accounting systems and what is needed for productivity analysis often means that bypassing the accounting data and developing data specifically for the productivity index will raise accuracy. But it is seldom worth the cost.

The costs can go even higher if you consider another factor: the time it takes to develop and implement a productivity measurement system. Lost time can translate directly into lost opportunities in to-day's turbulent business climate. As one manager complained to her staff, "Explain to me how taking an extra six months to get the measure more accurate is going to raise my productivity during those six months."

Measure the Unmeasurable

It's a real challenge to develop a productivity index that captures the roles of the direct factors of production in a way that workers and managers can understand. But the challenge goes further. Conventional systems to measure productivity often overlook two aspects of the production process that are becoming very important in determining international competitiveness: production time and the role of employees other than shop-floor workers. Since neither lends itself well to direct measurement, productivity technicians often prefer to look the other way. Managers do so at their peril.

The first oversight, time, is not purchased, so it is usually ignored. But the production process certainly consumes time, and the fact that it is not purchased doesn't mean it's free. If two businesses use identical machines, the same number of people, and equivalent materials to produce identical products, most productivity indexes would produce identical scores. But suppose one business ships orders within three days of receiving them and the other takes three weeks. Is their productivity the same? Obviously not.

This is not an exaggerated example. Increasingly, companies are discovering the competitive power of shortening their production cycles-or the dangers of not doing so. But unless a productivity index assigns some value to the amount of time consumed, it is unrealistic to expect managers to focus on shortening turnaround times. Assigning inventory carrying costs is a step in the right direction, although most companies record carrying charges far below their true competitive costs. Carrying costs should not only be realistic but they should also reflect where the inventory sits (in terms of value added) as well as how long it sits. An additional time-based charge that captures how long it takes to complete an order can focus attention even more directly on possible gains in turnaround time.

The new head of a sheet metal plant owned by a major electronics company learned this lesson soon after he took over. His operation's primary role was to process prototypes of new products, but he discovered that several company divisions were routinely sourcing prototype work to outside suppliers because of his plant's unacceptably long lead times. Productivity measures of labor, capital, and materials were quite satisfactory; the plant's work flow had been structured to get the most out of its people and machines. But that represented a misunderstanding of its mission. So the new manager introduced a productivity index that focused on turnaround time, and he posted the results prominently. Eventually, the plant cut prototype production time from 20 weeks to three days. The reconfigured operation makes less "efficient" use of labor and materials, but can anyone argue that it is less productive?

The second crucial but often overlooked aspect of many productivity measurement systems regards whose performance is being measured. Most systems target inputs on the shop floor, but manufacturing efficiency is not only a function of who and what are located there. Engineers, supervisors, and other white-collar employees make significant contributions to manufacturing productivity, but few systems measure their roles. (The Northern Telecom system cited earlier is a notable exception.)

To a large extent, the absence of such measures reflects two principal difficulties of quantifying productivity in any service setting: measuring output and connecting employee actions to outputs. For the line worker in an auto plant, output is basically the number of cars or components produced. The connection between worker activity and output is also straightforward-the person tightens three bolts on every car, and this action helps complete the car. Measuring the productivity of product designers is a much more subtle problem. Defining output as simply the number of models or prototypes completed does not begin to capture these workers' true productivity. Designing an item to make production smoother will improve the efficiency of the entire plant, for example. If such a design takes twice as long to complete as a simpler approach, it certainly does not mean that the engineer is less productive.

It isn't possible to measure white-collar outputs or inputs fully, but this fact doesn't mean that only blue-collar productivity can or should be measured. It does mean, however, that managers must be creative and open to new ways of thinking about an operation.

A plant manager of an important supplier to the auto industry met with resistance at headquarters to his request to augment his engineering staff. He knew that the additional money would be well spent, but he had no measurement system for making his case. The engineering staff focused heavily on improving the plant's use of materials. So aiming for a surrogate index, the manager argued that changes in the materials productivity index could be one indicator of the engineering team's productivity. Indeed, over time, as the size and expertise of the engineering group increased, the ratio of total output to materials input showed dramatic increases. As a result, the division's entire perspective on the relationship between the engineering function and manufacturing productivity changed.

Do surrogate measures give a complete picture of a group's performance? No. Are they true gauges of productivity? For the economist or measurement specialist, no. Can they focus managers and employees on critical aspects of the production process and, therefore, lead to improved performance? Yes. Productivity measures in the white-collar world can be relevant and effective, even if they aren't perfect.

Compare Apples and Apples

Ultimately, any productivity measurement system is only helpful if it's used appropriately. Management carries the burden of usage almost entirely. Productivity indexes today are being used to compare the performance of companies in an industry, plants in a company, and departments in a plant. The results influence investment choices, judgments about factory closings, and decisions on management compensation, so managers must be careful to make fair comparisons.

What is fair is not always obvious. Consider some of the ambiguities on the output side of the productivity ratio. Exhibit II describes the output in 1986 and 1987 of a hypothetical plant making two related products. In 1987, the price of product A rose, so many customers switched to product B. From the set of facts presented, what conclusions can be drawn about the change in output-and, therefore, the change in productivity? Depending on your point of view, output went up, down, or stayed the same. If you look at nominal revenues, output rose dramatically. If you adjust for the price change by comparing revenues using 1987 prices, output went down. If you focus on physical units, output stayed the same. You might look to standard costs for guidance, but they may also present a confusing picture as well as concerns about accuracy.

Exhibit II What Is Output?

What really happened at the company depends on what really happened at the plant and in the marketplace, not in the numbers. Was product A radically redesigned? Was the old price relationship between the two products somehow incorrect? Was there a dramatic change in input costs for product A? A manager must consider questions like these before evaluating productivity trends in such a case.

Price changes, of course, are not the only important factor affecting output. Quality has an impact on productivity measures. The most productive plant or company does not necessarily have the lowest cost per unit of output. It does have the lowest cost per comparable unit of output, though.

Suppose one company manufactures tires that last 15,000 miles and another company uses 10% more labor and materials to produce tires that last 30,000 miles. If the two businesses produce the same number of tires, it is not immediately clear which is more productive. Or suppose one enterprise, by virtue of a product development breakthrough, uses the same number of workers and machines to manufacture one million 15,000-mile tires in 1986 and one million 30,000-mile tires in 1987. Ignoring price for the moment, is output (and thus productivity) constant?

Comparing the performance of plants making different products requires a method to determine equivalencies. The three most common alternatives are standard costs, price, and technical parameters (like miles of tire life) that quantify product performance. No one focus is best; each has its strengths and weaknesses, and managers should select methods consistent with their company's strategy. If a company is and wants to remain a low-cost producer, it might focus on prices. If it wants to promote innovation, it might use technical parameters. Standard costs will focus attention on internal improvements independent of developments in the marketplace.

Managers also need to interpret trends, which can create further ambiguities. There is a fundamental distinction, for example, between levels of productivity and rates of productivity change. Looking at actual trends in a multifactor productivity index for two plants making identical products (Exhibit III), plant A's productivity exceeds plant B's in any given month and over the entire period. But whose performance should management worry about? As it turns out, plant B dramatically changed the run lengths in its production process, which improved productivity enormously. Corporate policies pushed plant A in the opposite direction, and its performance suffered. Here, focusing on absolute performance could mask important trends in relative performance.

Exhibit III Multifactor Productivity Trends at Two Plants

Things are often not as they first appear with productivity data. One big manufacturer, after introducing a multifactor productivity index, discovered that its plants had suffered a significant productivity decline in the early 1980s. Bad management, right? Wrong. Demand for its product had fallen sharply during the period and, given the fixed inputs, overall productivity had declined. One plant had an especially large drop. Bad management, right? Wrong again. The plant, located in a rural area lacking skilled labor, treated skilled and semiskilled employees as fixed costs. To lay off these workers would be to lose them permanently to other employers. The large decline in productivity in response to a six-month downturn was thus evidence of good management; the employees should have been kept on. Productivity measurement raises issues and highlights changes, but it does not tell the whole story.

Proceed with Care-but Proceed

The complexities and ambiguities of productivity measurement should not discourage managers from using a system. Profit measures, after all, are also far from perfect, but we are accustomed to their shortcomings and have learned how to glean a wealth of insight from them. Managers should proceed with productivity measures, but with care. The seriousness of a system's shortcomings depends on how it is used; if bonuses or promotions are based on certain measures, they had better be accurate. But this degree of accuracy is unnecessary for most applications.

Perhaps the most important use of productivity measurement is as an objective source of information about long-term operating trends. An index can draw attention to plants or departments experiencing unusual problems or uncommonly strong performance. Productivity comparisons can also inspire useful exchanges of ideas. Differences in the amount of vertical integration or subcontracting, accounting policies, and many other factors often obscure the relative productivity of companies. Nonetheless, if a business finds itself a lot less productive than a competitor, it probably has a real problem. Managers may insist that the productivity gap is overstated, and they may be right. They will be hard-pressed, however, to argue that it does not exist.

A version of this article appeared in the January 1988 issue of Harvard Business Review.

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No-Nonsense Guide to Measuring Productivity

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A few years ago, a major manufacturing-based conglomerate asked a gifted mathematician to join its corporate staff. One of his first assignments was to design a system that senior managers could use to evaluate the operating efficiency of the company's various divisions. He devoted many months to the assignment and also tapped the knowledge of [...]

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Jill Geisler highlights that being a happy manager, "...takes three things: strategic thinking, emotional intelligence and a passion for helping people do their best work, even in the face of diminished resources." If a manager is not happy, the employees and the future of the company can suffer due to lack of motivation.

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I recently spoke to Jill Geisler, who is the author of Work Happy: What Great Bosses Know. Her companion "Great Bosses" podcasts on iTunesU have been downloaded 8 million times - and counting. Jill heads the leadership and management faculty of the Poynter Institute. She teaches, writes and consults on critical issues for leaders and counts among her clients The Boston Globe, CNN, and the Washington Post. In recognition of her lifetime contributions to journalism, the University of Wisconsin honored her with its "Distinguished Service to Journalism" award, the Wisconsin Broadcasters Association named her to its Broadcast Hall of Fame, and the National Academy of Television Arts and Sciences inducted her into its prestigious Silver Circle.

In this interview, Jill talks about what it takes to be a happy manager despite the poor economy, how social media can create a happier work environment, and more.
What does it take be a happy manager in a bad economy?
It takes three things: strategic thinking, emotional intelligence and a passion for helping people do their best work, even in the face of diminished resources.

When managers think strategically, they are able to look at bigger picture goals and determine what of the many demands on their time they will make a priority.

With emotional intelligence, they can help their teams recover from setbacks and frustration while using targeted feedback to encourage their progress. (Remember, feedback is a renewable resource that costs managers nothing and pays great dividends.)

And that passion? It transforms them from yesterday's parental-type supervisors into what I believe today's best bosses must be: agents. Employees want to work for someone who approaches them as an agent would: "Sign on with me and I'll help you get to where you want to go. I'll be honest about your strengths and weaknesses. I'll guide you so you'll build a track record that serves you well here or wherever life takes you."
How can social media help build a happier work environment?
Social media is a game changer for internal relationships among colleagues and external relationships with customers. Some organizations view social media, first and foremost, as risk that must be managed. But it's wiser to think of social media as an invitation to creative communication. To instant feedback and problem solving. To putting a human face on people who once were only titles and offices. To building collaboration and relationships. The biggest risk is regulating it so tightly that people can't or won't engage.
What do you recommend for younger leaders as they develop their skills?
Don't worry about your age. Too many of the new managers I coach fear that have a neon sign over their heads that flashes "Untested-Green-Inexperienced."

But the word "new" has other meanings, including "Fresh-Innovative-Improved."

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How To Be A Great Manager That Employees Want To Work With

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Jill Geisler I recently spoke to Jill Geisler, who is the author of Work Happy: What Great Bosses Know. Her companion "Great Bosses" podcasts on iTunesU have been downloaded 8 million times - and counting. Jill heads the leadership and management faculty of the Poynter Institute.

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There are many opinions on what could make a manager successful, especially depending on the industry. Conceptual and Human skills require a unique balance for success.

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Corporate governance policies can make or break a company. How a company is elected and ran, to who is responsible for addressing issues, or how much effort is invested into charity could be the subtle difference between any companies that would drive better productivity.

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The Huffington post highlights that planning, organizing, influencing and controlling can serve as building blocks for understanding the processes and functions of management.

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There are several different processes of management, but four old-fashioned, but key functions that provide the "technology of management" are identified as: Planning, Organizing, Motivating, and Controlling.

Whether you run your own business, are starting a business, manage a department or just work hard, these four elements are imperative to ensure smooth operation and to meet your necessary operational goals.

1. Plan
First and foremost, management must create and stick to a plan. Setting goals is an invaluable task that must be done to establish order within a department or organization. Planning is the base function, as well as the foundation for management. Planning requires looking into and understanding the present state of the company or department and deciding where you want the company or department to be. Once the desired future has been determined, strategic planning must take place in order to get to where the company to that future.

Planning is a never-ending story. The minute planning ceases, the company or department will begin to deteriorate. Internal and external factors must be considered when planning is on the table. There will be times that long-term planning must take the back seat when short-term planning becomes a necessity or an emergency.

2. Organize
Once plans have been made and are ready to be implemented, organization comes into play. It is impossible to organize until plans have been set; once set, then organization has purpose. Organization combines the resources available to the team or company. These resources might include money, talent, technology, or tools.

The compilation of these resources is the most efficient way of accomplishing company and/or departmental goals. Management will systemize the division of labor and resources, as well as determine where authority and responsibility lie once organizational efforts have been established. Organization is the next logical step when planning has reached a certain point. Being that planning never ceases, it can be logically be assumed that organization is an ongoing task, as well.

3. Motivate
Once planning has been established and organization has begun, motivation becomes necessary to carry out said plans and maintain the established organization. Motivating (or directing) is also necessary in order to determine where each company or team member should dwell within the organizational confines. Motivation plays a significant part in influencing how each organizational or departmental goal is to be reached. Included in this process is open communication and supervision.

Building relationships of trust and camaraderie will aid the efforts of management in leading the company and/or department to success. This can be achieved through communication - supervisors communicating with employees, and executives communicating with supervisors, co-workers to co-workers, team members to team members. These are all part of the motivating/directing function.

4. Control
Controlling involves evaluating the efforts of the organization in goal achievement. Providing feedback from every corner plus follow-up and follow-thru to evaluate progress and achievement. Cross-functional team meetings and departmental gatherings allow for comment and response or in determining when a change of course is necessary.

This function allows for resolution and change that is compulsory. Through this process, predictors are in place and crisis can be prevented and/or averted. This is a continuous process in that the company and department will forever need to be challenged, controlled, and managed.

It is possible to reach goals and attain success through faithful participation in an old-fashioned but timeless management process.

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There are several different processes of management, but four old-fashioned, but key functions that provide the "technology of management" are identified as: Planning, Organizing, Motivating, and Controlling. Whether you run your own business, are starting a business, manage a department or just work hard, these four elements are imperative to ensure smooth operation and to meet your necessary operational goals.

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It is easy to assume Jobs was an outstanding manager based on his monetary success. However, because he was not able to have the compassion needed to manage people, he might not ever be the greatest.