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The mind of the CEO

Graham Little PhD AFNZIM

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CEO in the movie Margin Call: …’do you understand why I get the big bucks?’ … pause…’because I am expected to know what the music is going to do tomorrow’…

The key CEO decision is making the call as to the direction of the music and what to do about it, thereby pointing the strategic direction. … Once the direction settled, then the crucial issue is guiding the roll out of the direction…

Imagine the mind of the CEO, and imagine it glowing a color, it does not matter what color. The color represents the strategy as it is in their mind. Not as it is in the strategic plan, but as it is living in the mind of the person who made the call…

Now imagine the mind of every other person in the organization a shade of that color, the shade difference between the mind of the person and the mind of the CEO reflects the gap between the strategy as the CEO sees it, and the contribution to that strategy as seen by the person.

If every person exactly sees what they need do to make the greatest contribution to the strategy from within their job, and the CEO would agree, then their mind is the same shade as that of the CEO.

Think of your organization. Is the mind of every person in sync with the CEO or is there variation in color shading?

Once the strategy and organization structure are decided does the CEO have anything more important to do than the roll out of strategy? After the decisions, everything, results, reputation, staff satisfaction depends on people doing that which they need do when they need do it. The OPD method of organizational design makes strategic human resource management the driver of strategy, identifying those actions every person must do to contribute to strategic success.

Aligning every mind to what it must do to deliver its contribution to the strategy is the single, crucial skill that every CEO must have. After the decisions, the CEO has nothing more important to do.

The Mind of the CEO shows how to align minds in pursuit of the common goal of successful implementation of strategy.

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Published by

Self Help Guides Limited Auckland City New Zealand

info@opdcoach.com

A reaching for infinity book

Copyright © 2011 Graham Little

Second Edition, April 2014 ISBN 978-1-877341-27-4 Graham Little asserts the moral right to be identified as the author of

this work.

All rights reserved. Except for purpose of fair reviewing, no part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying,

recording, or any information storage or retrieval system, now known or hereafter invented, without permission in writing from the

publisher.

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Prologue

The mind set for a CEO outlined here is proved in clients in New Zealand.

What is offered is practical, clear, direct and it works. The CEO implementing OPD-SHRM will build a company with the greatest chance of the greatest strategic success.

The approach of OPD-SHRM is new. Many of the foundation ideas are not new, such as the goal-action principle, or the idea that to get it clear in mind we need get it clear on paper first. But the thoroughness of their application is new. Sound, simple, practical ideas thoroughly followed through, the result is a new way of ‘seeing’ the organization and a new set of tools for building and leading one.

The foundation of the improved technology is much deeper, and grounded in a fundamental revision of the methodology necessary to build theory in social science. We build organizations, they are not things, like trees or rivers, separate from our activity, therefore they are integral to social science and do not, cannot stand apart from it. Many of the sound, simple practical ideas of OPD arose from within the application of this methodology to the system ‘person in their environment’, since within that there must exist all to do with organizations.

As in physics in the last one hundred years better theory leads to new, improved technology so better social science theory leads to new and improved organizational technology. The foundation of improved social science insight and theory results in many other ideas that add to the emergent technology of OPD making it the thought leading system carrying us into a future with better managed organizations that better serve communities.

However, the current ideas are heavily entrenched. The shifts in thinking needed are much more than realized at first contact with this new manner of thinking. Achieving the shift in policy and deep mind set throughout the organization takes more than offered here, but once achieved, what is offered here will maintain and build on the initial set up and guide the company to long term success.

There is a short section on implementation, and the web site describing the OPD-SHRM system is www.opdcoach.com.

For more information email info@opdcoach.com.

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Contents

The job of the CEO.................................................................................. 7

The OPD theory for strategy rollout ........................................................ 9

The CEO’s plan for strategy delivery .................................................... 10

Overview of the theory .......................................................................... 12

Strategic HR first priority for the CEO ................................................. 25

Building the performance culture .......................................................... 26

Crucial CEO strategic monitoring ......................................................... 29

Why strategic HR is socially important ................................................. 30

The financial results from the OPD-SHRM .......................................... 33

How to double profits ............................................................................ 34

Payback ................................................................................................. 35

Testimonials .......................................................................................... 37

HRIS and SHRMIS ............................................................................... 38

Implementation of OPD theory ............................................................. 39

OPD terminology................................................................................... 41

Appendix ............................................................................................... 52

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The job of the CEO The 2011 movie Margin Call explores the beginning of the global

financial crash in a Wall Street finance firm. John Tuld, played by Jeremy Irons, the CEO and Chairman of the Board is urgently called to a late night meeting of his senior team as they come to realize they are in danger of imminent collapse.

Tuld …’do you understand why I get the big bucks?’ … pause…’because I am expected to know what the music is going to do tomorrow’.

Having decided what the music is going to do then the CEO has to make the call of what the firm is going to do about it. For anyone remotely close to this level of judgment and decision making you will know this is not simple. You will also know that it precisely sums what the CEO has to do. Listen, weigh, and make the call.

The organization chart shows the organization as a sort of triangle sitting on its base, CEO at top and the people closest to the customer at the bottom. It could be inferred that the CEO at top is the most important person. In deciding the direction of the music and what to do about it, they are the most important person. Once decided however, the triangle needs to be reversed, with the CEO in the point at the bottom, with the most important people those closest the customer at the top. Those at the top generate the money, but only after the decision made as to where the effort is to be applied in the market.

The triangle on its point, resting on the CEO then reflects the reality that success or failure rests on the CEOs head. When organizations fail the first person frequently replaced is the CEO, not the operational staff on the front line.

The music is then knowing how the market is going to respond tomorrow. Surveys and all the rest help, but if Henry Ford had done a survey he would likely not have gone into motor cars…he backed the fact people would like better, more efficient and more comfortable personal travel.

The CEO does not need the clearest concept of the product-market fit, nor have the clearest concept of finance, or HR, they may not be the one best at detailed admin. But they will clearly ‘see’ and ‘sense’ the relative importance of all those things, and have a clear idea of what each element contributes to the result. They will understand enough of everything, they will ask sharp

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and penetrating questions as they are guided by their instincts seeking balance in their mind equipping them to make the final call.

The key CEO decision is making the call as to the direction of the music and what to do about it, thereby pointing the strategic direction. I think the instinct to be number one, to make the call, is intrinsic, people have it or they do not. Which is as well, since we do not need that many at that level. Once the direction settled, then the crucial issue is guiding the roll out of the direction.

Imagine the mind of the CEO, and imagine it glowing a color, it does not matter what color. The color represents the strategy as it is in their mind, not as it is in the strategic plan, but as it is living in the mind of the person who made the call.

Now imagine the mind of every other person in the organization a shade of that color, the shade difference between the mind of the person and the mind of the CEO reflects the gap between the strategy as the CEO sees it, and the contribution to that strategy as seen by the person.

If every person exactly sees what they need do to make the greatest contribution to the strategy from within their job, and the CEO would agree, then their mind is the same shade as that of the CEO.

Think of your organization. Is the mind of every person in sync with the CEO or is there variation in shading?

Once the strategy and organization structure are decided does the CEO have anything more important to do than the roll out of strategy? After the decisions, everything, results, reputation, staff satisfaction depends on people doing that which they need do when they need do it. The OPD method of organizational design makes strategic human resource management the driver of strategy, identifying those actions every person must do to contribute to strategic success.

Aligning every mind to what it must do to deliver its contribution to the strategy is the single, crucial skill that every CEO must have. After the decisions, the CEO has nothing more important to do.

The Mind of the CEO is about aligning minds in pursuit of a common goal.

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The OPD theory for strategy rollout The OPD-strategic human resource management theory below.

Where would you like to be? Hopefully at the bottom with greatest results, and with the most satisfied people. This book is about how the CEO needs to think and what they need to do to get the greatest result, build the best performing culture and have the most satisfied people.

Strategy Organization structure, roles defined by KPIs Current effort Current game plan Current result

Improved effortImproved effortImproved effortImproved effort

Better game plan Improved result Much improved results Greatly Greatly Greatly Greatly improved improved improved improved resultresultresultresult

Satisfaction in success. Engaged. Finding flow and having fun. Perfect game Perfect game Perfect game Perfect game planplanplanplan

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The CEO’s plan for strategy delivery The strategy is selected, the organization structure decided, now…

Goal-action

There are dotted arrows from ‘strategy’ to the ‘perfect game plan’ conveying the link between the goal and the actions that best enable goal success.

CEO goal 1: There is a perfect game plan drafted in every role that defines outputs (KPIs), derived from strategy, that are expected from the role. The game plan also clearly specifying the ideal actions offering greatest chance of greatest success with the outputs. If the ideal actions delivered to standard, the outputs achieved.

Linking ideal actions to the mind of those assigned the role

Imagine looking at a house with view to buying it, what would you see? Now imagine looking at the same house with view to burgling it, what would you see? This work has been done1. The researchers found the lists totally different. No overlap. We see with our mind not with our eyes. What does this tell us of our psychology?

Imagine just behind the eyes people have a box of power point frames, I refer to them just as ‘frames’, for short. The system of frames is the structure of our psychology.

Everybody has the box of frames. What is on the frame is our personal point of view, us, how we think. Our attention directs what we use to ‘see’ something. Our attitude gives the slant on what we see, glass half full or half empty. We want ‘buy’ and up that pops, and that is how we ‘see’ that which we are looking at. Then burgle, and so that is what we ‘see’.

If people do not ‘see’ what to do they do not do it. We do that which is in mind. What do people ‘see’ when they think ‘work'.

1 Anderson, R.C. and Prichert, J.W. Recall of previously un-recallable information following a shift in perspective. J.Verb.Learn.Verb.Behav.1978, 17, 1-12. As an interesting aside, note the date.

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CEO goal 2: That every person has a frame in mind of the perfect game plan in their assigned role(s).

Commitment and motivation

Imagine you saw your child being swept out to sea. What would you do…? Imagine the image as a frame, followed by another frame which was your response. The urgency and emotion flow ‘through’ the response frame driving the actions. We could say you were motivated to save your child. Motivation as emotion flowing through a frame. In the case of saving one’s child, fear. But fear is not a good motivation base for work.

The best motivation base at work lies first, in the person’s commitment to their personal success, defined as delivery of the agreed ideal actions (on their work frame) to standard. Second, in the level of emotion flowing through their work frame. The emotion to be developed by the team leader who ensures the people in their team having fun, enjoying the day, enjoying the success, being acknowledged, being accepted, feeling supported in the striving for personal success. Where possible the people guided to find flow2 in their daily delivery of the agreed ideal actions. People enjoying the journey each day and put in the ‘extra’ effort because they choose to.

CEO goal 3: Every team leader is guiding people to choose to be successful, develop skills, have fun, enjoy the job, enjoy being at work, enjoy the team environment, find flow in delivery of the ideal actions, ensuring lots of positive emotion flowing through the frame on which is located the perfect game plan.

CEO aim

Perfect game plans perfectly delivered.

2 Flow is the idea that people are at their happiest when the ‘lose’ themselves in the task. Csikszentmihalyi, Mihaly (1996), Finding Flow: The

Psychology of Engagement with Everyday Life, Basic Books. The OPD definition of engagement then arises immediately from these ideas, namely people in flow, delivering the ideal actions with verve and commitment, and happy doing so.

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Overview of the theory Human performance is a strategic factor in the profit and loss. If the

strategic management of human performance is improve relative to the profit and loss, results must improve.

Strategy is only enacted when someone does something. It follows that the effort of people needs to be aligned and harnessed so everyone is ‘pulling in the same direction’. The issue becomes to identify exactly what each person needs to do to make the greatest contribution to achieving strategy.

Determining the organizational structure

Begin with strategy, then identify the key performance indicators (KPIs) that need delivered to achieve the strategy. Group KPIs ‘like with like’ to define divisions, teams and roles in teams. This core structure of the organization determined by the grouped KPIs derived from the strategy is called the goal cascade3.

Goal → action

The theory is based on a simple principle, that for every goal there are actions that go with that goal. If you want to achieve a goal, there are things you need to do, and if you do not do them then you will fail at the goal.

Goal → action is universal and applies to all goals. The arrow says that if you change the goal you will change the actions needed. (It is called an Ashby diagram, but I suggest you do not worry about that, it is an intellectual issue you can accept and get on with guiding your business.) The actions needed are called ideal actions.

The principle of goal-action is perhaps not new, but the thorough application of the principle to the design of organizations is new and leads to a redefinition of the role of human resources (HR) in an organization and the relationship between a strategy, the CEO responsible for the roll out of strategy and HR.

Ideal actions

Ideal actions are of the quality that doing them does not guarantee success, but not doing them guarantees failure.

3 Note, the core of the organization structure is not about people or about jobs, but about how the KPIs best map the strategy onto the market.

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Ideal actions offer the greatest chance of greatest success.

Not too many KPIs nor too diverse

If all the KPIs achieved, then the strategy achieved.

KPIs lead immediately to ideal actions and are best thought of as the immediate link between what people need to do and strategy. It follows that the crucial aspect of any KPI is NOT the number. It is the nature of the written KPI since from that is derived the ideal actions. The number is important for current budgeting, but as people learn about the KPI and the ideal actions that achieve it, then the number will improve.

Not too many KPIs, if there are people can get ‘lost’ in the myriad of ideal actions that arise from the KPIs. Priorities get lost and diffused.

Do not put together very divergent KPIs. The breadth of ideal actions will be too great for anyone to be able to deliver them.

Imagine putting a CFO KPI in with a Sales Director KPI, this would require the person to have an exceptionally broad range of training, skills and experience, and disposition, from sales to finance, asking them to adopt an impractically broad range of behavior to do their job. Silly example, but it makes the point.

Current game plans

Current game plan is what is in the mind of the person currently assigned the role, which will have arisen from a blend of the typical job description, what their team leader thinks and what the person themselves thinks.

Making game plans clearer

If you make it clearer in someone’s mind they have the opportunity to do it better. Or in reverse, if they are not clear on what they are to do they are unlikely to do it well.

Now, everyone in your organization is likely to say they are clear, when what they mean is they are clear in relation to how it has always been thought about.

Imagine someone writing down from their mind the key actions offering greatest chance of greatest success in their role. Would they offer up the sort of clarity and precision you would be content with, or your division manager content with? This is the issue of ‘shading’ of mind relative to the CEO.

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You can assess the potential impact of this process in your organization by asking yourself on a scale of 1 to 10, 10 high, on average how clear are people as to what they need to do to make the greatest contribution to strategy?

If you assess 8 or less, there is scope for improving that to 9. If less than 8, you have more than a 10% opportunity to improve human performance. Later I will show how a 10% improvement in human performance can double profits.

To get it clear in mind it first needs to be clear on paper

Ever had the experience of thinking you know something until you go and write it down? A crucial principle is to get it clear in mind get it clear on paper first. What must be got very clear are two crucial links.

1. The definition of the KPIs in each role that are needed and define the role relative to strategy.

2. The ideal actions derived from the KPIs (based on goal → action).

Job descriptions do not do this, not unless yours are the exception to the rule, which honestly I doubt very much. Ask yourself, how effective are current job descriptions as a coaching tool…? Any hesitation at all, and they are not effective. Scope for improvement, but that is not merely rewriting them, but revising the whole concept and redesigning a whole different set of strategic human resource management (SHRM) tools. Which is what this book is about.

The OPD-SHRM role specification

The role specification is the tool that defines the KPI outputs expected from the role and that define organization success in the role. From the KPI is identified the ideal actions in the role. So we have another Ashby diagram Strategy → KPIs → ideal actions, which means if we alter the strategy we alter the goals which alters the ideal actions required to achieve the goals

A ‘game plan’ is the role specification, summarizing the results expected (KPIs) and the ideal actions that offer greatest chance of greatest success. The game plan needs to be not too long, not to short. Enough detail to be effective, and not so much detail as to be tedious.

Integration of business processes

Business processes integrate the organization into an operational whole as efficiently as practicable. No business process is enacted unless someone

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does something. It follows that the business processes must be specified in role specification (the game plan for the role) and are part of the ideal actions in the role.

For example, assume a business process integrates the effort in three roles, then the role specifications should be able to be laid side by side and the business process clear in the ideal actions across the three roles, each person doing their part of the process.

Getting people involved

Senior leadership set the strategy and design the organizational structure judged to best map strategy onto the market. Senior leadership then guides selection of the roles in each team judged necessary to achieve the expected outputs from the team. If each team achieves its expected outputs, the division achieve its outputs. If each division achieves its outputs the strategy is achieved.

The team leaders draft the role specifications and agree the draft with their senior manager.

The team leader then discusses the role specification with the person assigned the role. The role specification is then amended until the person assigned the role says … ‘yes if someone does those ideal actions those KPIs will be achieved’. There is now an agreed game plan for the role that when implemented offers greatest chance of greatest success.

Giving people a choice

Above all people need to choose to be successful, then agree that the best way to get the best result is via the ideal actions specified in the role. Choice. If they will not so choose, then work to remove them early rather than later.

People do not find it directive, they have all the opportunity in the world to work on and comment on the agreed ideal actions that enable the greatest chance of greatest success. Then what is required is the self-discipline to do each day that which they agree is the best way to get greatest success.

Buy-in

People are asked to buy into personal success in their work life.

The route to their success is to focus on the ideal actions agreed as offering the greatest chance of greatest success in the role assigned to them.

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People commit to delivery of ideal actions

Once completed the game plan has been authorized by the division manager, the team leader, and agreed to by the person assigned the role. Ultimately the responsibility for the game plan rests with the CEO, since it is the CEO who is responsible for the achievement of the strategy.

The goals (KPIs) are not negotiable. They define the nature of the ideal actions needed by the organization to realize the selected strategy.

Ideal actions are negotiated, the input of the person assigned the role is accepted and added into the role as appropriate. The person assigned the role is fully engaged in determining the detailed ideal actions in the game plan. The only proviso is that the agreed ideal actions must directly contribute to achievement of the KPIs.

Most importantly the standard of delivery is negotiated with the person which will determine the number achieved for a KPI.

Once the game plan agreed, people are asked to manage and control the one thing they can be held accountable for, their own behavior at work.

Beyond the actual skills at the job, the important general skill is having the emotional intelligence to contain emotions, and focus the mind on the ideal actions in the game plan agreed to offer greatest chance of greatest success. This focus and commitment must include the understanding of the ‘moments of truth’, that is those moments when the standard of delivery of the ideal actions is crucial in relation to achieving the KPIs.

Organization success and personal success

Organization success is achievement of the KPIs.

Personal success is delivery of agreed ideal actions to standard.

The person is doing the job now, they exhibit their current level of commitment. They are not requested for any additional commitment, merely requested to focus their commitment more tightly on those actions that offer greatest chance of greatest success. As they do, they do they increase their personal success at work, and as they improve delivery of agreed ideal actions they improve organizational success.

Everybody wins, not by working harder, but by working smarter.

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Engagement

People able to ‘see’ themselves acting out the ideal actions without any negative emotions.

Positive engagement is people able to ‘see’ themselves at work delivering the ideal actions and enjoying it. Positive engagement is finding flow in ideal actions.

Motivation

Team leader thanking people for their positive engagement, doing ideal actions, even when the goals are not achieved. People respected, encouraged, supported in their effort to achieve personal success.

The team leader interacting every day enabling people to enjoy the day at work, even when working hard. Ensuring positive emotions fill the people, and those emotions flow through the agreed game plan filling the agreed ideal actions with energy and drive.

Performance management

The person CANNOT be held responsible for the KPIs which are derived from the strategy.

The person CANNOT be held responsible for selection of the ideal actions, which are a collective judgment between the person assigned the role, the team leader, the team leader’s team leader, and ultimately the CEO.

The person CAN ONLY be held responsible for the standard of delivery of the agreed ideal actions.

The standard of delivery of ideal actions is to be discussed between team leader and the person at least each month. This review is to retain agreed ideal actions as ‘top of mind’, and identify what the person is going to do in the coming month to improve their delivery of the ideal actions. (And hence improve KPI success.)

Is this directive? Does a tennis ace have a choice of whether or not to play on a court? Or a golfer have the choice of shifting their ball because they do not like the lie? It is not directive, but it is certainly disciplined.

Every person has at least monthly opportunity to review and discuss the ideal actions appropriate in their job. Every month they have the opportunity for creative input into the role specification for their assigned role(s). Between the regular discussions they are expected to deliver the agreed ideal actions to standard.

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Role of the manager/team leader

To ensure the behavioral structure is clear in their team, that every person is clear in mind, and that they are delivering the agreed ideal actions and having fun and enjoying the effort.

The actions needed for a team leader are the same at every level of the organization, hence once learned do not need to be adapted or new skills learned as the person is promoted.

The behavioral structure

We can now imagine all the ideal actions throughout the organization derived from every KPI of the organization. I call the set of all ideal actions the behavioral structure of the organization. If the behavioral structure is well conceived, and then delivered, then the organization has greatest chance of achieving its strategy.

The behavioral structure is derived from strategy, agreed by all staff from CEO down as the best way to enable greatest success for the organization.

Working ‘in’ and ‘on’ the business

Working ‘in’ the business is delivery of the agreed ideal actions. Working ‘on’ the business is the person reviewing their ideal actions with their team leader. Every person is given at least monthly opportunity to work ‘on’ the business at the appropriate level.

Management versus leadership

The theory offers the first effective balance between administration and staff interaction. I define management as the administrative activity of getting game plans clearer. As shown in the diagram, a clearer game plan at the same level of effort will generate a better result.

Improving the game plan and capturing it in writing is the learning firm in action. Imagine a top sales manager, they drafted really top, sharp game plans, then they left. The incoming manager can now begin where the old one left off… with sharp game plans.

Managing the level of motivation and retaining ideal actions top of mind, I call leadership. The theory makes management as important, if not more important than leadership in that building clearer and more effective game plans is administrative, and much more controllable than dealing with team members to improve results.

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The administration is important. Management reviewing and working with teams to refine the ideal actions in the team so that the results against KPIs improve. But the results do not improve unless the ideal actions are actively held in the minds of the staff. There needs to be regular team leader activity whereby ideal actions are reinforced by finding people doing things right, and by regular meetings to keep ideal actions ‘top of mind’.

Human capital4

Slavery is abolished. Therefore the company cannot own any aspect of people. Those aspects of human capital related to people I call ‘dynamic human capital’. Dynamic human capital cannot be capitalized on the balance sheet.

Game plans however, are fully owned by the company. The definition of the behavioral structure implicit in the game plans represents the best judgment of how to enable the greatest result. I refer to the behavioral structure as defined in the game plans as the ‘standing human capital’ of the firm. Standing human capital is captured in the OPD-SHRM information system (OPD-SHRMIS), and can be capitalized on the balance sheet.

The better the quality of the standing human capital, even at the same effort level, will enable a better result.

The more effective the leadership in guiding improved staff effort will also improve profits.

Therefore, improve human capital improve profits.

Organization development

The leadership activity of improving the quality and definition of the behavioral structure. This includes definition and clarity of game plans, review of the organizational structure, divisions, teams and roles in teams.

Training

Training is developing skills in people enabling improved delivery of the behavioral structure.

Training should raise the standard with which ideal actions are delivered therefore improve the KPI from which the ideal actions are derived.

4 For an extensive discussion, see Human Capital, at www.amazon.com/author/grahamlittle.

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Coaching

The regular interaction between team leader and team member where the team member is being guided by the team leader on how to improve their delivery of the ideal actions.

Staff development

Assume someone has the skill at a given level within the organization. Say middle management. Development is the broadening of their intellectual perspective such that they can ‘see’ the issues, and therefore successfully operate at a higher level in the organization.

Developing the broader understanding enabling the person to balance the factors at higher level within the organization.

MBWA

Management by walking around is the regular walk around the team by the team leader assessing that the behavioral structure in the team is being delivered to standard. MBWA is recommended at least once every day.

While assessing team activity, the team leader interacts with the team to encourage a laugh, acknowledge good work, correct inferior work, and guide people in finding flow in their agreed daily ideal actions.

Making use of reports

Numbers are a summary of effectiveness in delivery of ideal actions. Therefore a financial report on any team summarizes if the team leader identified the apt behavioral structure and guided delivery of that structure.

Each team is being encouraged to strive to improve delivery of the latest agreed ideal actions each day at work.

OPD-SHRM team culture/climate audits assess the extent the team is delivering the team behavioral structure. The team leader works to improve the quarterly team climate audits thereby improves delivery of the ideal actions in the team and hence improves team results.

The firm is monitored by financial reports, but managed via the SHRMIS (see below) system which captures the behavioral structure and via team audits monitors the delivery of the behavioral structure in the team. Improve delivery of the behavioral structure, improve results.

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Accountability of the CEO

The CEO is fully accountable for identification and delivery of the behavioral structure. The CEO can delegate to the Human Resource Department and to the leadership responsibility for identifying the behavioral structure and its delivery to standard.

The CEO can never absolve themselves from accountability for the quality of the behavioral structure nor the quality of its delivery. This accountability is intrinsic to the role of the CEO.

Culture of professionalism

Imagine a top tennis player. Imagine the frames in mind linked to immediate court circumstance, they do not have time to ‘think’, they ‘see’ and do it. Highly trained and skilled response.

Now think of what we have seen when they win. Often they will drop to their knees, throw their arms in the air, or fall to the court. Why? It is the emotional relief, and as much the emotional release.

We can understand the tennis player as having precise frames in mind backed by the skill to do that which is on the frame. In the game they need concentrate very hard, they cannot allow any other thought or emotion to enter their mind, only what is happening on court and the frames they need use to respond. The concentration harnesses ‘muscle memory’, they do not have time to think, they must depend on the muscle memory and concentrate to harness to the immediate response on court.

The level of concentration, the intensity, the objective focus gives clarity. This is then driven by their desire to win the game, or at very least play to the very best of their ability. To deliver on court.

Highly refined frames, maintained free of all extraneous emotion, actions empowered by the commitment to do what is needed when needed.

Professionalism is the term I use to describe the objective approach to what needs done backed by the emotion to do it well. Being professional is not merely being paid, it is an approach, an attitude, to our work.

Work is different to sport. A person cannot be asked to maintain that level of intensity eight hours a day, five days a week. But, a person can be asked to have the same relationship to their work as the professional sports person has to theirs.

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Clear frames on what is needed to be done. Work frames kept clear of extraneous emotion. Daily fun guided by the team leaders so there is lots of positive emotion that fill the frame with energy and desire to do well. The reality of personal life must be recognized. If a person has a sick child, for example, then they cannot be expected to not think about that. If the situation severe, then they take time to deal with that.

The organization culture is attentive, quiet, relaxed, and focused. Intensity lifts at moments of truth, those special situations where performance is that bit more critical.

Cultural tone flows from the top

The CEO needs to be verbal ready, responding to any perceived shortfall in leadership focus on identifying the delivery of the behavioral structure. But verbal ready is not enough, they must also be the cultural role model in how they offer their verbal ready encouragement.

The CEO can set the tone of professionalism in the manner they promote the processes of the OPD-SHRM and the manner they offer their verbal ready responses to any shortfall in the leadership focus of identifying the behavioral structure and guiding its committed delivery.

With staff who are not team leaders, then the CEO has verbal ready response on being a professional and conducting oneself on the basis of quiet, steady, focused effort doing what is needed when needed.

On the tennis court there is no time to think. At work there is always time to think. This makes the relation between the person and their work the same as with sport, but much more relaxed, more gentle, less intense, since there is always time for a coffee, to take five, clear the mind and decide what is best.

From good to great

By defining the behavioral structure, building a professional culture focused on delivery of the behavioral structure the organization can improve dramatically profits, engagement, staff empowerment and staff satisfaction.

Within in the OPD theory, the organization has the opportunity, by refining the behavioral structure and improve how it is delivered, of pulling itself up by its own bootlaces. This is exactly the same as the tennis star or golf star working to improve the forehand or the draw shot no matter they do it very well now it can be better.

From good to great is to go to improved delivery of improved game plans.

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Definition of strategic human resource management

The current typical definition and approach to strategic human resource management (SHRM) is the link between human resources and the strategy of the business.

Within OPD-SHRM theory strategic human resource management is defined as the identification of the behavioral structure and guiding its delivery. This is a consequence of the theory that makes OPD-SHRM different from current global view of leadership, management, engagement, etc.

This difference OPD theory and current global organizational best practice changes everything to do with the relationship between people and work, and changes the management of human performance in the organization. It is the degree of difference that makes the implementation more subtle and difficult than it may at first appear.

The role of human resources in OPD theory

The OPD-theory makes people truly the greatest resource of the organization.

The theory places HR as the key proactive force in the organization wide rolling out of strategy. The HR Department becomes the technical center of expertise in partnership with every team leader, on how to achieve best results in a team.

The CEO delegates HR to work with team leaders to identify and refine the behavioral structure; to overcome shortfalls in team performance; and guide delivery of perfect game (perfect game plans perfectly delivered).

An HR Department based on the OPD-SHRM would have two aims, first the proactive strategic management of human performance to support identify and deliver the most apt behavioral structure. Second, to ensure all compliance accurate and up to date. To deliver these aims the department would adopt the basic structure - compliance and administration, organization development, training and development, and the HR advisors to partner/support team leaders.

Human resources delegated to advise the CEO that:

• The behavioral structure relative to the strategy has been identified across the organization and it is being implemented with verve and commitment.

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• All compliance and regulatory administration is correct and up to date.

• There is definite evidence across the organization of ongoing striving to improve the game plan, and improve delivery of the game plan.

• Corrective action has been initiated relative to any shortfall as needed, by HR and/or divisional manager take disciplining action.

• All teams are undergoing regular reviews of their behavioral structure aiming to refine it and refine delivery of it.

HR becomes the ‘right hand’ of the CEO, supporting the CEO by partnering with team leaders in identifying perfect game plans that are then perfectly delivered.

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Strategic HR first priority for the CEO Imagine the strategy and organization structure agreed, and the roles

defined by KPIs and ideal actions in every team. From the point of view of the CEO the organization is a strategy with an underlying behavioral

structure as the set of agreed ideal actions that need to be acted out if the strategy is to have greatest chance of greatest success. Once the strategy and organization structure agreed the CEO has nothing more important to do than oversee identification of the behavioral structure and guide its delivery. The behavioral structure can also be defined as the collection of game plans that define what needs to be done in each role. Identification of game plans and guiding their delivery is defined in the OPD method as strategic human resource management.

The aim of strategic human resource management within the OPD method is perfect game plans perfectly delivered.

Hence once strategy and organization structure agreed the first priority of the CEO is strategic human resource management. Everything to do with the organization flows from the quality of the roll out of strategy that is from the quality of implementation of strategic human resource management within the organization.

The CEO delegates the leadership structure, the team leaders to implement the strategic human resource management within their teams and division, etc., supported and partnered by the HR Department. But as the single person responsible for strategic success the CEO cannot delegate responsibility for the quality and momentum of strategic human resource management within the organization.

Responsibility for the quality of game plans and quality of their implementation ultimately rests with the CEO.

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Building the performance culture I assume by the time a person gets to CEO they have business skills and

well developed social and interactive skills. There is implied here a set of organization leadership skills, none of the steps are difficult to understand although there are complexities in the details of implementation. The important issue is in the integration and retaining quiet steady focus throughout the organization of identifying the best behavioral structure, and developing a quiet, self-disciplined professional culture whereby what needs to be done is done when needed to be done.

The basics of the organization are concrete in as much they are in business plans, role specifications, policy manuals and the like. All the living reality of the organization, that part that delivers results, is in the minds of the people in the organization.

Below are suggested issues where the CEO needs to be ‘verbal ready’. Fluent and quietly persuasive with insight and understanding thereby ensuring people are kept steadily focused on identifying the behavioral structure and its delivery every day at work.

Everybody throughout the organization needs to retain top of mind at all times that if the behavioral structure is apt and delivered to standard the strategy is given the greatest chance of greatest success.

The CEO begins by ensuring direct reports are also verbal ready. Then follow through and assess extent the senior team is building the professional, focused, self-disciplined culture in the next level down and so on.

I suggest the CEO have a few paragraphs able to be fluently delivered with quiet, clear, self-disciplined conviction on at least each of the following topics. That this verbal readiness is used whenever the CEO encounters comment or actions inconsistent with perfect a plans perfectly delivered

• The OPD-SHRM for rollout of strategy. The diagram clear in mind.

• What it means to be a ‘professional’, that is the nature of the relationship between a person and their work is exactly the same as the relationship between the professional sportsperson and their sport.

• The role of self-discipline in success. The attitude of doing what is needed to be done when it is needed to be done.

• Why success is a better choice in life than failure or mediocrity.

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• The definition of success at work as delivery of the assigned and agreed ideal actions to standard.

• The role of HR in partnership with team leaders in identifying the behavioral structure and guiding its delivery. HR as the source of technical expertise for the strategic management of human performance throughout the organization.

• The importance of emotional intelligence ensuring our minds are clear enabling focus on the ideal actions assigned and agreed in the role.

• Ensuring strong management that drafts better processes, sharper ideal actions, improved policy and integrates them into improved game plans.

• The importance of creativity focused on identifying better game plans.

• The importance of strong leadership that guides people to make the choice to be successful in their job and to focus on delivery of the agreed game plan.

• That ultimate leadership success is when people fully agree the behavioral structure and as a matter of habit arrive at work each morning committed to strive to deliver the perfect game that day.

• That the exact aim of management is to identify the ideal actions that when they become habit will ensure strategic success.

• That the exact aim of leadership is to make the agreed ideal actions habit throughout the business.

• That it is crucial for every team leader every day to find someone in their team doing the agreed ideal actions, and thanking them.

• That it is crucial for every team leader to ensure every team member is having fun, has a laugh and is enjoying themselves in doing the things that need done to be successful.

• That a financial report on a team is merely a numerical summary of the extent the team leader identified the apt ideal actions relative to the KPIs, and guided delivery of those actions.

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• That creativity is crucial, that every team leader must be working ‘on’ the business with their team by identifying better business processes, sharper policy and better ideal actions and then drafting them into the game plans in the team and guiding their delivery so team results improve.

• That every team leader must talk to every team member at least every month about keeping the game plan ‘top-of-mind’ so enabling the greatest chance of the game plan being enacted every day at work.

• That every team leader review with every team member at least once a month how well they delivered the assigned and agreed ideal actions that month, and what they will do to improve their delivery of the ideal actions in the coming month.

• Satisfaction begins with our delivery of the perfect game.

• That we need to have fun, but business is not a ‘game’ in the sense of it being trivial and lightweight.

• That our aim is success arising from perfect game plans perfectly delivered.

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Crucial CEO strategic monitoring The above summarizes the focus of the CEO on strategy roll out. In

addition, the CEO must be particularly focused and aware:

• Of changes in the economic, political, or social climate that could impact the strategy.

• Of changes in the competitive environment which may not directly impact the strategy but could impact results arising from the strategy.

That is the CEO must keep a wary eye on influences that could alter the music tomorrow.

If the economy changes, this may entail shift in strategy and hence review of the behavioral structure in the teams impacted.

If not getting results. If a team or teams are consistently identifying apt KPIs and apt behavioral structure and professionally delivering that structure, but still not achieving the result, then the initiating strategy should be reviewed.

Both circumstances are cause for the CEO to undertake strategic, investment and operational.

Any change in strategy or direction or investment could alter goals in teams and hence result in the full review of the KPI cascade and the ideal actions that arise from that cascade. In short, if the strategy is changed, then the full OPD process needs repeated from the top.

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Why strategic HR is socially important I have previously mentioned Ashby diagrams. They are derived from the

work of W Ross Ashby5, the British cyberneticist, and adapted by me as intellectual tools enabling conceptualization of complex systems6. I will not discuss Ashby diagrams here, and refer you to the texts for more detailed discussion should you choose.

In short, if we have A → B, the arrow means ‘a change in A has an effect on B’. Notice, Ashby diagrams are sentences redrafted to make the logical conceptual structure clear with the meaning of the arrow always clearly in mind, so we read change A and B changes. Ashby tools enable conceptual reasoning, they are very powerful in the analysis of complex systems, especially social systems, and are the crucial tools used throughout my work, including this book.

Now, this book has been about the link between human performance and the profit and loss to the extent we can categorically say that a change in human performance will have an effect on results. We can now legitimately use the Ashby tools (which is how I refer to them), to rewrite this sentence as an Ashby diagram (1) below.

(1) Strategic HR → organization results.

Further, we understand the economy of any community is simply the group of organizations that generate the wealth of the community. The results of organization success determines economic success, and we can write (2).

(2) Organization results → economic success.

The community wealth depends on its economic success, hence (3).

(3) Economic success → community wealth.

Community health depends on its wealth, for example, if the community does not have the wealth to obtain enough water, or food, or medical care.

(4) Community wealth → community health.

5 W. Ross Ashby, Design for a Brain, Chapman, London, 1960. 6 To explore further, refer The Origin of Consciousness, or Rollout, both at www.amazon.com/author/grahamlittle.

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The Ashby tools have an interesting property in that, within the rules, we can legitimately take the first variable and the last and show them linked in a summary Ashby diagram. Diagrams (1) to (4) are referred to as immediate effect diagrams, while (5) is the ultimate effect of the first four.

(5) Strategic HR → community health.

Recall this is a recast sentence which says that improving strategic management of human performance in the organization will flow through and have an effect on the health of the community within which the wealth is created.

There are legislative issues that moderate the links, for example, (6).

(6) Strategic HR → (ownership and governance) → community health.

This sentence states that improved organizational success is moderated by the owners and governance and does not always flow fully to the community within which the wealth is created. I will not discuss social philosophy, and leave this section on the basis that given our current open, free society, then improving strategic HR to improve organizational results will have definite positive social impact, even if not as great as perhaps it could be7.

Summary

Under OPD theory, corporate culture revolves around two crucial factors.

1. Identification of the ideal actions that enable greatest chance of greatest success.

2. The self-discipline of people to act out those ideal actions as and when needed.

The emergent self-discipline has an immediate effect on organization results and ultimately feeds through and has an effect on community wealth and health.

For any society, there is almost nothing more important than identification of the ideal actions that underlies its economy and ensure those actions delivered to standard. The owners, governance, executive, people and politicians all have a vested interest to see that the behavioral structure

7 See Building Community Wealth and Health for more complete discussion, at www.amzon.com/author/grahamlittle.

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underlying the society’s economy is clearly identified and delivered. Perfect game plans perfectly delivered for the whole society, organization by organization, by…

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The financial results from the OPD-SHRM

The ideal actions are derived from the KPIs (A). Therefore if actual behavior is moved closer to the ideal actions (B), results must improve.

Moving actual behavior closer to the ideal actions is called ‘improving human performance’ (1). The link between improved human performance and the numbers is called the OPD-profit profile link (OPDPPL) (2). This is based on understanding that if actual behavior is made closer to ideal actions, then results must improve, and that the relationship is quantifiable. OPDPPL quantifies the link in business. The OPDPPL varies from sales to overheads, and from industry to industry. Sales have the greatest link since sales is virtually all behavior.

The gain in results (OPDPIF) is the multiplying the increases in human performance by the appropriate OPD-profit profile link, that is (1)x(2) above, for each line in the profit profile.

Actual

behavior

Ideal actions

Goals/KPIs/result

s

Leadership judgment (A): Team leader works with the team member to build clearer more effective personal game plan coordinated with the team game plan, ideal actions derived from goals. So goal-action is causally engaged in the organization. Leadership effectiveness (B): Team leader then guides & support delivery of the personal game plan. Team leaders spend 20 minutes per month per role in one-on-one discussions.

(1) Input to move actual behavior closer to ideal actions. Typical is 8-16% improvement.

(2) Typical for each 1% gain in performance sales increase 0.3%-0.4%, direct costs decrease 0.2%-0.3%, overheads decrease 0.1%-0.2%.

Diagram 1: Causal link to results (OPDPPL) via each mind

• OPDPPL is the profit profile link that is the link between changes in human performance and the profit profile.

• OPDPIF is the OPD profit improvement factor, calculated by multiplying 1 by 2.

A

B

Ideal actions

KPIs

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How to double profits Improved human performance can improve profits to the extent that

investment in the strategic management of human performance as defined here is potentially the most profitable single investment available for the majority of companies.

In the spreadsheet below, profits are more than doubled by a 4% increase in sales; a 4% reduction in direct costs and a 1% reduction in overheads. These are not excessive figures.

10% increase in human performance. OPDPPL sales of 0.4%. OPDPPL operations 0.4%. OPDPPL overheads 0.1%.

Sales 200,000,000$ 100% 4.0% 208,000,000$ 100%

Direct costs 120,000,000$ 60% 4.0% 119,808,000$ 57.60%

Gross profit 80,000,000$ 40% 88,192,000$ 42.40%

Overheads 72,000,000$ 36% 1.0% 71,280,000$ 34.27%

EBIT 8,000,000$ 4% 16,912,000$ 8.13%

Profit gain from better SHRM 8,912,000$ 111.40%

Frequently, an increase in human performance of 10% will achieve these increases in sales, and reductions in direct costs and overheads.

Frequently, it is merely guiding people to prioritize their actions more tightly, focus more on those actions that most drive greatest results and concentrate to reduce errors and rework.

Frequently, it is people understanding why, and how, and then choosing to make the game plans work. Choosing personal work success. Choosing to participate with the team leader and enjoy the day.

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Payback The system was created around 2002/3. It took several years to build the

SHRMIS administration system in support. The first client acquired in 2006. It then took 5/7 years to really understand how to implement the system and really make it work. The system has been fully commercialized since mid-2013. This new approach to building organizations is a revolution just beginning.

The following are two case study examples, illustrating the sort of payback in line with projections and approach. The current empirical research base is light, not that there are no other clients, merely that these are the clients where we secured the financial data. Over the next year or two, we will secure many more examples, and prove the links between strategic management of human performance and the financial results are as projected in the OPD system.

Case study 1: Refining the minds in a small team

Michelle was the parts manager in an automotive dealership. She had two direct staff reporting to her. Results were strong, with a gross margin of over 27% (regarded as a very good result in NZ motor industry). She was applying the OPD system, and had worked conscientiously to develop clear and effective ideal actions derived from the KPIs as agreed with the Chief Executive Officer (CEO) and owner of the dealership.

She had held initial meetings with her two team members, and they had agreed the ideal actions and their commitment to delivery of those actions. In short she saw it working, the improvement in sales numbers proved it in her mind and she was committed to continue applying the OPD theory approach.

During a review she said she did not really execute the one-on-one performance appraisals, but kept on top of it by regular brief and daily interactions with her team. It was suggested to her that if people are to generate sustainable changes in behaviour they needed to have their mind in the right place. It was then discussed how to get people reflective, and how to really get clarity in their thinking. She agreed that it was best done without distractions, and where the mind of an employee was clear. Finally it was discussed that the idea of professionalism required a steady focus on what to do and commitment to do it each day as needed.

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After reflection she agreed, and committed to do one-on-one meetings to engender more professional reflection in the minds of her team member, ‘pulling them out’ of daily routine activities and assisting them to get clear on what is really needed and why. When they had agreed she gave them her re-commitment to improve clarity and focus to get work done to a better standard.

Over time employees sharpened their ideal actions, and there were clear and definite signs of improved professional focus. Employees felt good about their professional efforts at improved delivery of ideal actions. Sales improved along with improved customer satisfaction and profits increased.

Case study 2: Building the minds in a sales team

Let’s focus on the results for a sales team where OPD was implemented late in year 1 and was operational in year 2 with the following results reported as shown in Figure 4, which shows the gross profit generated by the sales team in year 1, compared to the gross profit generated in year 2

Figure 4: Improved gross profit in a sales team.

Month year 1 year 2 %year 2/1

Jan $98,900 $110,400 111.63

Feb $89.300 $110,000 123.18

Mar $91,400 $115,800 126.7

Apr $140,700 $107,400 76.33

May $112,700 $119,800 106.3

Jun $97,100 $128,700 132.54

Jul $110,600 $114,000 103.07

Aug $127,000 $106,300 83.7

Totals $867,700 $912,400 105.15

There is a 5% increase in sales gross profit attributed to OPD, representing a substantial lift in final profits, in line with theoretical projections. It is also projected from the model that the increase in self-discipline would result in more consistent delivery of ideal sales action producing in more consistent sales results, and this was progressively occurring. Results and performance continue to improve as the employees become used to the new culture and new way of thinking.

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Testimonials Below are comments on the OPD system. The first is by a Professor of

HR and reflects his assessment of the concept within the global understanding of the HR theory and practice.

“The OPD model, based on the research of Dr. Graham Little, is a

solution to the HR questions being raised and is the most logical and

thorough intellectual development currently available in the HR field….It is

apparent that the OPD approach also entails practical solutions and is 10

years ahead of current thinking in this field.” Dr Pieter Nel, Professor of HR, Unitec, Auckland.

The initial financial data supports this assessment, and will be proved conclusively over the next few years. The OPD system is a new approach to building organizations that is destined to become the ‘way it is done’.

Other comments from clients as below.

• Follow OPD method, the money just turns up.

• OPD-SHRM system improves the alignment of staff activity with strategy ... people working a lot smarter they become much more effective and more satisfied with the result ... business performance improves.

• ... OPD has made a real difference to our levels of human performance, and it has done this while building more focused and more positive teams. It is definitely showing up in our financial returns and the extent results have improved has been surprising.

• ... Delighted with the positive impact it has had on our team and business results over the short period we have been using OPD.

• If the focus, accuracy and effectiveness of your people influence results, then ... consider OPD. And best yet, amid the tighter focus, increased effectiveness and improved financials - the whole team are celebrating more and enjoying it more.

• Adopting this system (OPD-SHRM) and applying the advice provided can do nothing but improve your business.

The OPD-SHRM system is extensively refined and matured since the majority of these comments as I hope this book testifies.

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HRIS and SHRMIS Human resource information systems administer HR without really

driving human performance. They contain job descriptions, and other, more useful, information on HR metrics. The job descriptions are inadequate and reflect the organization structure, rather than focus on what needs to happen in the job to enable the greatest success. Sometimes job descriptions can form part of the base at defining the necessary OPD-SHRM role specification, but often do not even adequately fulfil that function, and our experience is that it is often better to begin from scratch without any historical thinking contaminating the OPD-SHRM implementation.

SHRMIS is the strategic human resource management information system derived from the OPD-SHRM theory. It captures the standing human capital of the firm, integrated with the recommended regular cultural audits on delivery of the behavioral structure in each team, and includes performance management system, and talent identification and management system. In short integrated SHRM administration and support.

We recommend a firm have both HRIS and use the relevant data, and SHRMIS to capture its standing human capital and guide delivery of the behavioral structure.

For more on SHRMIS and the balance sheet, see Human Capital, at www.amazon.com/author/grahamlittle.

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Implementation of OPD theory The CEO is responsible for strategy selection and delivery.

Strategy is rolled out if and only if people do what they need to do when they need do it. Guiding this process is the responsibility of the CEO since to fail in rollout of strategy is to fail at the strategy. The system makes strategy rollout a crucial skill needed by all CEOs.

Under OPD strategic human resource management (SHRM) is the crucial driver of success. Implementation is via the Human Capital Development (HCD) Committee chaired by the CEO. The CEO designates a Human Capital Development Manager (HCD Manager) from within the HCD Committee who is responsible to the HCD Committee to partner and oversee every team leader in delivery of OPD-SHRM performance processes in every team.

We support the CEO by improving insight and skill at strategy delivery throughout the organization, working with the HCD Manager in partnering with every team leader in delivery of the strategy rollout processes in the team.

I do offer a caution, I have had sufficient experience now to know that the changes needed are deeper and much more far-reaching than they may appear in this book. For example, the process has the social impact of moderating ‘authority’ in an organization, people are more of equal status, committed to a clearly expressed role specification, assuming self-responsibility, contributing to refinement of the role specifications, with team leader having an additional role of guiding the team to have fun and enjoy the day while delivering the game plans to standard. The social structure is closer to that of a democratic sports team, greater participation, with recognition that the coach is no more important than the people who go onto the court to achieve the result.

A fundamental social shift is the requirement that people are individually accountable for their conduct at work, choosing to contribute to team/organization success. Each person doing that which they agree to do, some roles demanding different skills, but each person approaching their role in the same manner, the same emotional structure, the same intent. Hence people different in skills, but equal in all other respects which alters sense of self-esteem, sense of involvement, sense of being accepted and being a worthy person. These are subtleties which lie in the conduct of the team

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leaders and team members alike, but the conceptual structure of the system provides the foundation for these shifts in team relationships.

The complexities of implementation lay in social subtleties and shifts in thinking about what is management and what is leadership and the relationship between the two. Team leaders need rethink their role and relationships in the team, and this change needs begin with the CEO.

This book while practical is an orientation to a new way of thinking about people linked to the organization. A new orientation to the fundamental task of harnessing human effort to a common goal.

Strategy is a complex goal pursued over time. If we agree that proposition, then goal → action principle directs there will be a behavioral structure underlying strategy, so that if that is more clearly identified, and people guided to deliver it more effectively then the business must enjoy better results. (Refer to diagram 1 above.)

The whole theory is fundamentally scientific and reasoned from the core base of social science. The intellectual base of the philosophy is in the book The Origin of Consciousness, while the organizational intellectual base derived from ‘Origin’ is in Rollout. Both books found here www.amazon.com/author/;grahamlittle.

If the set up and initial shifts in mind set and policy changes are well achieved, then the CEO following the guidelines here will succeed more than by implementing any other approach. Major gains in results arising from empowered staff.

OPD International offers:

1. Lease of an SHRMIS web based system, hence accessible from anywhere.

2. Advice on implementation of OPD-SHRM.

3. Training materials for initial set up training of Executive and team leaders and staff.

4. Conduct initial setup and training as needed. Training and development of internal people to guide implementation longer term.

The business web site is www.opdcoach.com.

To enter discussion and seek advice on implementing OPD-SHRM in your organization, then contact info@opdcoach.com.

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OPD terminology Below is the management language consistent with the OPD-SHRM for

roll out of strategy. It is recommended the CEO understand this language and from it draw their verbal fluency.

Every divisional manager is expected to be fluent in the terminology and verbal ready to exercise the senior leadership that will most enable achieving the strategy.

Accuracy. Precision of delivery of the agreed ideal actions in a role.

Architecture. The team structure and roles in a team, with each role defined by KPIs and ideal actions derived from those KPIs. The architecture groups KPIs in roles, roles in jobs, business units and divisions, thereby defines the organization structure.

Accountability at work. Each person is accountable for their own behaviour at work and the extent that behaviour is aligned with the ideal actions agreed as behavioral best practice in the assigned role(s).

Behavioral structure of the business. The complete set of ideal actions that underlies strategy.

Behavioral balance or behavioral best practice. Combination of distribution of available time between roles and distribution of available time across the ideal actions.

Behavioral range. The range of ideal actions expected in a role, it is important that the KPIs are not too broad not too many otherwise the behavioral range can become unrealistic, see ‘like with like’.

Buy and burgle. Social science research by Anderson and Pritchett from the sixties; 50 people put into a house and asked to look at buying it. Then second group of 50 put into same house and asked to burgle it. Both groups then kept separate and asked to write down all they could recall of the house. There was no overlap between the lists. Point of buy and burgle is we see with our mind, not our eyes.

Coaching. Supporting the person build and develop their professional frame of mind. Guiding improved delivery of ideal actions including positive engagement with a team member.

Competencies. The generalized skills of a person. Only relevant under OPD at recruitment. Focus of OPD is on delivery of ideal actions, and is thus more specific than implied by the term competencies.

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Creativity. Cannot plan creativity, but can plan to be creative. Fundamental is to get the concept right first.

Craftsperson. People doing a repetitive skilled task essential for the organization. The attitude adopted by people as regards their commitment to complete repetitive skilled tasks deriving daily satisfaction in a job well done.

Cultural audits. Audits the extent every person is clear on the goals in the roles assigned them (focus); clear on the ideal actions derived from the goals (accuracy); committed to do the ideal actions; sees the business processes as assisting them achieve; and feels supported by their team leader in their striving to achieve.

Current goals. The variable part of performance specification where goals agreed for a fixed time, usually three months.

Customer satisfaction audits. Audits extent customers satisfied with value for money; quality; administration; communication; technical advice; service.

Delegation. Determined by the distribution of KPIs and ideal actions where each person acts knowing that through the design structure their actions are coordinated with actions of people they may never see or with whom they may never communicate

Difference between knowing and doing. We know much more than we apply. Knowing does not mean we will do it, since doing is often dominated by habit not intellect.

Emotional intelligence. The skill of being able to ‘be in the moment’, stay calm and to shut out the personal or other factors that undermine delivery of the ideal actions needed to get the best result.

Entropy as driver of habit. Entropy is the direction taken by energy of all physical systems to fill lowest possible energy states. The brain is a physical system. The thrust of entropy in the brain is to drive habit, the acquired response to any stimulus, which represents the lowest energy flow through the neural system. People have thoughts as part of habit, but such thoughts are not causal and are irrelevant to understanding the driving forces of habit. Only active conscious attention can overcome habit. This is the inherent human conflict between physical determinism (habit in the form of entropy) and free will.

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Engagement. The visualization of the ideal actions. Positive engagement is the visualization of ideal actions with associated positive emotions.

Ego. A convenient term used to describe those aspects of psychology relating most to self and self-interest. It is not a technical psychological term.

Ethics of business. Expectation on every business to be a ‘good citizen’. As a citizen, adhere to the moral and mores of the community. To act according to the main expectation of business in society, that is providing continuity and growth in jobs and asset development.

Expectation on the individual in business. To be ‘professional’ in relation to delivery of the agreed ideal actions. (See ‘professionalism’ as a state of mind and ethical framework.)

Focus. The person’s clarity of the goals (KPIs) in the roles assigned.

‘Focus’ as a state of being. The active application of emotional intelligence to exclude factors not consistent with the task. The person is fully ‘enclosed’ within the ideal actions that offer greatest chance of greatest goal success.

Flow. From the work of Mihaly Csikszentmihalyi. Where a person is fully in the moment and circumstance of what they are doing (see focus as a state of being). Within the theory, the leadership focus is on getting people to flow as regards the ideal actions of their role.

Frames. A simple theory of human the psychological structure. We ‘see’ the world via what is on the frames (as in power point frames.

Frame of reference. Frames do not exist in isolation, rather there are frames related to frames, and frames nested within frames. The frame of reference is the overreaching frame that pervades our ‘orientation’ and within which are nested detailed frames relevant to the situation. Typically, the frame of reference sets the emotional tone in all nested frames. For example if one does not like sport, this will influence watching a tennis match, no matter how exciting the game. In work, the frame of reference is the choice to commit to success at work.

Goal integrity. The extent the cascade of goals/KPIs relates back to the strategy.

HR policy as the populations ‘bill of rights’. HR policy spelling out what the organization expects of the population and what the population can expect from the organization. HR policy links people directly with the organization independent of the person’s team leader.

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Human performance increase. Defined precisely as an improvement in delivery of ideal actions. The improvement can be: Improved definition of ideal actions. Increase in volume of ideal actions as percentage of behavior at work. Increase in commitment/intensity of delivery of ideal actions.

Human capital value. An organization cannot own people, therefore can never hold ‘human capital’ in form of people. Human capital value consists of (1) standing human capital value expressed in leadership judgment of behavioral best practice relative to the strategy, then capture of the learning in the SHRM information system; (2) dynamic human capital value expressed in leadership effectiveness as the extent the population exhibit committed delivery of the ideal actions to standard.

HRIS. HR information systems that administer HR, such as leave, pay, sickness, accident, etc.

Ideal actions. Those actions derived from goals offering the greatest chance of greatest success. Ideal actions are goal driven, independent of people.

Implicit value of success. The OPD-theory allows for organizations to be founded with the intent to fail or succeed, but the emphasis is given to the value of success.

Internal customer audits. Assess the extent each team serves other internal teams. Extent one internal team serves other internal teams who are then satisfied with quality, administration, communication, and technical advice.

Individual or role performance specifications. The definition of the goals/KPIs in a role, and the ideal actions derived from those goals.

Induction. The introduction of new recruits to the OPD-SHRM processes as it will affect them.

KPIs. The numerical link between strategy and ideal actions in roles. Primary tool for defining the ideal actions needed in a role. It is the structure of the KPIs that defines ideal actions, with learning then the level of KPI will increase.

Leadership judgment: Setting the aim, guiding identification of the roles to achieve the aim, KPIs in each role, and then ideal actions from each KPI.

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Leadership effectiveness: Guiding positive engagement to ensure delivery of agreed ideal actions.

Learning firm. The architecture is the core of the learning firm, representing collective judgment of how to achieve greatest success in every role. The learning firm is the captured leadership judgment in the SHRMIS system.

Organizational coherence. Grouping like goals with like goals to ensure the range of skills and behavior needed in the role is realistic and achievable. Also applies in grouping roles, so division formed by grouping like roles with like roles forming sales, operations, finance, etc.

Management/leadership ethics. Managers may request people achieve goals and advise actions likely best suited to achieving goals. Managers have no right to tell people how to think or to be critical of their attitude, rather: ‘your success is your choice, it begins in the mind, and that sort of thinking is inconsistent with achieving committed delivery of ideal actions to which you have agreed. If ideal actions not acted out and hence results not achieved, we will apply discipline procedures’.

Organization design specification. The set of assumptions deliberate or assumed that determine the form of the organization.

OPD-Theory. The causal and scientific theory of the link between strategy and staff behavior and is the basis of the OPD-SHRM organization design specification.

OPD-SHRM. The set of HR processes and tools derived from the OPD theory.

Organization population. The people who populate the architecture.

Organizational culture and style. Culture is the core aspects of ensuring delivery of ideal actions as derived from the architecture. Style refers to whether people wear casual or formal dress; or refers to each other as sir or madam, for example.

OPD balanced scorecard. If any organization loses touch with the hearts and minds of its population, it will perform less well than it could. Low internal audits suggests unstable future profitability. If any organization loses touch with hearts and minds of its customers, it will perform less well than it could. Low external audit suggests

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unstable future profitability. The balanced score card relates the internal and external customer audit data to provide guidelines on stability of future profitability.

OPD profit profile link (OPDPPL). The link between improved human performance and the factors in the profit and loss. The OPDPPL is normalized to a 1% increase in human performance and is different for sales increase, direct cost and overhead decreases.

OPD performance improvement factor (OPDPIF). The projected increase in human performance multiplied by the OPD profit profile link. For example if the increase in human performance is 10 percent and the OPDPPL for sales is 0.2percent, then the OPDPIF will be 2% increase in revenues.

Organization development. Development of the architecture. Does not involve people.

Organizational change. Organizational development (which does not involve people) including review of roles, and role definitions, may also include team structure. Plus the psychological changes to ensure the new ideal actions are acted out.

Organization implementation potential. Assessment of the extent a person in a role has the skills in relation to the ideal actions agreed for the role. The assessment in each person in each role is collated and becomes the organization implementation potential.

Organization structure. The selected grouping roles to form business units, sections, and divisions. The rule of ‘coherence’ applies, in that it is more effective and efficient to group like goals with like goals.

Ownership. Personal success is the person’s delivery of agreed ideal actions. Goals KPIs are ‘owned’ by the management rather than the person. The person expected to own their behavior at work. Their success is then the extent they discipline themselves to ensure their actual behavior at work fully reflects the ideal actions they agreed had the greatest chance of greatest success.

Personal choice and free will. The choice each person makes in relation to his or her work life. See personal success, performance agreement, and performance contract. The individual’s choice to be successful in their work life.

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Perfect human performance: Perfectly derived KPIs, with perfectly derived ideal actions perfectly delivered.

Performance gap: The gap between perfect human performance and actual human performance.

Performance assessment. The review of the extent the person’s actual behavior at work reflected the agreed ideal actions. See coaching. This discussion is then ‘objective’ since it is about the person’s delivery in an agreed role in an agreed manner. The emotional relationships are the same as in sport. Willingness to have such discussions measures the degree of openness to learning. This is an important cultural factor. Conducted at least monthly. Performance assessment is designed to support people to see’ and ‘visualize’ how well they do the ideal actions and select those actions they will work at improving.

Performance management. The formal review of the person’s performance. Is much less significant under OPD than the regular process of performance assessment. Often performance management restricted to those in the talent pool.

Professionalism. A state of mind where ideal actions as needed when needed is done at work. Entails willingness to apply emotional intelligence, self-discipline, and an acceptance of feedback on how the delivery of ideal actions can be improved.

Performance agreement. That there are ideal actions derived from goals. People expected to be professional as regards delivery of those ideal actions. That people expected to support making the ideal actions sharper and more effective. People expected to strive to improve their delivery of the ideal actions.

‘Permissions’. The list of key underlying psychological items forming the basis of personal choice and commitment.

Performance contract. The commitment of the person to their personal success at work.

Personal development planning. The process of reviewing with the person their personal success, agreeing coaching, and permissions to enable them to improve their personal success.

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Performance pay. Pay in relation to the organization’s success. Profit pool is the device to protect organizations profits in performance pay systems.

Personal success. Measured in delivery of ideal actions. Not measured by goal achievement.

Population. The people who populate the architecture.

Profit profile. A clear and simple summary of the key lines of revenues and costs with each line linked to the goals and KPIs of teams and roles in teams.

Performance stack. Based on the understanding that all reports summarize leadership effectiveness at guiding delivery of the ideal actions. The understanding that all financial and other information modified only by using the OPD-SHRM tools.

Rational agreement or rational commitment. People saying ‘yes’ and meaning it, but they have not done the psychological work on translating the ‘yes’ into action. See ‘what we know and what we do’. They intellectually agree, or rationally agree, but do not yet do it with behavior dominated by old habits.

Recruitment. Recruit with a mind to the ‘permissions’, which is the framework of underlying attitudes determining success at work. Is the only time when competencies used under the OPD-SHRM system. Identify where the person has had experience with ideal actions similar to the ones required in the role for which they are applying. Assessing this is via details of their experience not from their competencies.

Roles in business. A role is a unique set of goals/KPIs and ideal actions. Roles should have integrity, so it is crucial not to mix different KPIs into one role. For example, sales and marketing and quality assurance and production supervision are different roles potentially in the same job. In the OPD-SHRM system, team leaders always have two roles, namely their ‘work’ role and the role of team/individual development. It is crucial to ‘see’ and understand roles as psychological structures, not administrative structures.

Role of business in a free society. Contribute to community wealth via wages, salaries, expenses. To be a ‘good citizen’.

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Role of the individual in business. To deliver the ideal actions agreed as behavioral best practice. To be a professional that is to ‘see’ the role of business in the community and to do their part in supporting their own community by delivery of ideal actions in the assigned and accepted roles.

Scientific background. The science is constrained by the demand of ‘first things first’. This leads to all topics of intellectual enquiry sitting in a ground of necessary pre-existing concepts answered before any discussion on the topic can proceed. That scientific theories deal only in variables and their relationships. For example the easy and hard problems of consciousness where the variables and their relationship provide a complete solution to the easy problem, and by inserting values into the theory, there is complete solution to the hard problem. The hard problem already resolved, in literature and song and art, that describes exactly ‘what it is like to be’ under specific circumstances. To build clear and predictable scientific theories requires appropriate tools able to lead the conceptualization process. In physics, the tools are mathematics. In social science, the tools are W Ross Ashby’s immediate effects, ultimate effects, and primary operations, plus the analysis of variables as conceptual abstractions.

Scientific ‘ground’ of management. Management is part of social science, therefore constrained by the rules of science, and influenced by the issues in social science. Issues to be resolved prior to being able to discuss ‘management’ include: What is cause? What is the structure of a general theory of psychology? What are the variables and how do they interact using the agreed tools that fully describe a person in their environment? Do ideas exist, and how? Are ideas causal in human affairs and how? Is an organization separate from people? How does an organization exist and in what form? If an organization is separate from people, then does it have an internal structure, and what is that structure? What exactly is the link between the organization and the understanding of people as in the general theory of psychology? Globally, the only theory of leadership built on full understanding of science as defined in the sections above is the OPD-theory.

Scientific organizational leadership. The practical application of the OPD-theory to enable team leaders to achieve sustainable results from

their team superior to that achievable by any other known process.

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Self-management to fulfil a role. Self-discipline in relation to personal choice.

Self-discipline. The deliberate attention to ensure actions match those agreed as the ideal action in the role. Discipline needs applied until the actions required become habit. See professionalism.

SHRM. The process of clarifying the performance gap and then closing it.

SHRM as the core driver of results. The understanding the all reports merely reflect the extent the leadership succeeded in guiding delivery of the ideal actions.

SHRMIS. The strategic human resource management information system capturing leadership judgment of the behavioral best practice.

SHRMIS KPIs. Monitoring that every team leader is implementing the strategic HR processes that offer the greatest chance of positive engagement with every member of their team.

Social role and social obligation of business. To stay in business. To grow and so grow the wages, salaries and expenses as an underpinning to the community wealth and health. To be a good corporate citizen. To act as conservators of society and so cautiously follow changing social norms.

Strategy. The central purpose of the organization and the reason it exists. The device coordinating the efforts of the population.

Strategic aim. A short summary of benefits, to whom and the expected returns. A summary of what the organization will do, for whom, the cost and the payback.

Strategic HR. Defining and closing the performance gap.

Talent identification. People with outstanding skills and commitment in relation to identifying and guiding full delivery of the ideal actions in a team.

Talent development. Intellectual development enabling promotion to higher levels of the organization demanding broader and more refined intellectual skills.

Team performance specifications. The performance specification of the team. The key outputs of the team, derived from the team aim, these assigned to roles in the team to build the goal cascade/goal integrity.

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Time budget. The acceptance we cannot manage time but can manage our actions. Distribution of our effort across the actions needed within the time available. Allocation of time across roles. Allocation of time across ideal actions in a role. These allocations reflected in the daily diary.

Team performance improvement project planning. The use of team audit data (cultural audits, customer satisfaction audits, internal customer audits, human performance and organizational capability audits) to create action plans to improve team performance. Audits are recommended every four months.

The dog sled analogy. Imagine a dog sled, eleven dogs each behind the other with one lead dog. What is view of each dog, except for lead dog? To ensure OPD-SHRM understood as a harness. But it can become wearisome, so an important aspect of team leadership is to get people’s head up and ensure them enjoying the journey.

Training. Developing the skills of the person to deliver ideal actions in their role.

Visualization. The person able to ‘see’ themselves acting out the ideal actions in the role.

Verbal audit. A verbal check by team leaders that the architecture is fully in place and the tools/processes applied.

Working ‘in’ and ‘on’ the business. Working in the business is delivery of ideal actions in the role. Working on the business is reviewing the ideal actions to improve and refine them. Everyone has the opportunity to work on the business at their level, guided by team leaders to do so every few months, or when it seems applicable, such as if economic conditions change.

Zero tolerance for error. Principle of setting standards for key goals. For example, airlines do not have a goal allowing pilots land to safely 98 percent of time. The goal is zero crashes. Therefore, goal should be zero errors. Errors will occur, but they do not have permission to occur.

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Appendix Graham Little’s first series of books on management the ‘101 ways’ series

published by Reeds remains one of New Zealand’s largest selling series of management books. Dr Little also had a ‘leadership’ series of five books published in London by Management Books 2000,which sold modestly in the UK market, had a monthly column in Management Magazine for 10 years and a talk back spot on leadership and management on 1ZB for four years.

Today, his views have been updated in the redesigning the organization

series combining 40 years of practical experience in organizational consulting, counselling, and human development with in-depth research. All the books are written for a general reader and do not require any special understanding of philosophy, psychology, social science, management or leadership. Commentators have noted the books are …engagingly written…

clear and easily read… easy to digest practical books …vivid descriptions

and relaxing learning environment.

Practical experience

1. PhD in Chemistry from Canterbury University.

2. Chemical sales representative with Shell Oil.

3. Training and recruitment Officer with Shell Oil.

4. Built a training company, The New Zealand Business School, with 45 staff six venues which trained over 16,000 delegates yearly on business short courses. The NZBS was liquidated in 1993 after the 1987 stock market crash and the subsequent recession in New Zealand. I was bankrupt 1993-1996.

5. For over ten years a monthly column for a leading management magazine.

6. Four years a weekly program on leadership on radio 1ZB, New Zealand.

7. Lectured on management and human resources at Manukau Institute of Technology and Unitec.

8. Written nine books on leadership. Five published in United Kingdom.

9. Created principles and intellectual tools of theoretical social science and applied them to create general theories of psychology, knowledge, causality and sociology.

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10. Created the OPD theory leading to the redesign of the organization book

series.

Contact

I have two adult children, a keen trout and salt water fly fisherman, and live in Auckland, New Zealand. I can be contacted through graham.little@opdcoach.com.

The redesigning the organization book series

A series of books on the OPD system written from different points of view.

www.amazon.com/author/grahamlittle