The Ed Eppley Experience
The Ed Eppley Experience

Episode · 2 months ago

The Reason Your Business is Struggling Is Your Structure, Not Your Strategy!

ABOUT THIS EPISODE

Structure is one of the biggest causes of problems in our businesses. But those problems look like poor performing people, unhappy customers and supply chain issues, not the structural issues that are the root cause. Bill Hutter is the first of our experts on how your structure needs to keep pace with your strategy. He's watched literally hundreds of companies work to change their ineffective structures to match their strategies. You'll enjoy learning from Bill's insight and expertise!

Mhm. Do you think some organizationshave a structure by default or do you think they truly design it? Most have astructure by default baby. Welcome to the Ed Ecklieexperience 20 minutes that simplifies the complex job of managing and leadingpeople and inspires you to take action on what you probably already know tobuild and sustain a smart and healthy business. Here's your host, Ed F lee tointroduce this week's guest and business leader. Welcome to the EpleyExperience. It's your time to learn from experts about ideas that they havefor you operating a more sustainable and successful and profitable business.We're focused today on the concept of structure. It's near and dear to myheart. I have long believed that 50% of the problems that most companies haveare directly or indirectly related to some issue that they have with theirstructure, but they may not identify. They actually show up as symptoms ofother things regardless. We've got a guy with us today who's been with usbefore is Bill Hunter and builds a personal friend, a very successful Ceoin his own right. And I thought if there's anybody who could share ideasand wisdom with regard to structure, it would be Bill Bill. For those who havenot heard you on our podcast before, why don't you give me a little bit ofbackground about who you are, where you've been, what you've done in yourcareer? Well, it always starts with being an Ohio guy and tell the commonsense married to the young lady I met and sunday school a long time ago sothat really helps with stability and support. I tended to be a businessfixer, started my career in the restaurant business and I worked forpeople that made money elsewhere and thought it would really be fun to getinto a restaurant known a restaurant and then they would go Holy Mackerel,what kind of business is this? And then they would hire a guy like me to comein and fix the operations and it was typically on a 3 to 5 year gig. Andthen I would look for the next project That led to my understanding thatreally people are the most important asset and any business and I out ofthat I formed a hr outsourcing and consulting company in 1995 and we had apretty nice track record um exited that company after, you know, three or fourspinouts and technology companies and everything else that's affiliated withit exited that company Actually it's November 1st 2017 I retired, they toldme I was no longer needed. So I went, thank you very much and I went off intothe sunset and you and you become a professional traveler since then youhave a very professional traveler that was part ofthe plan and uh with blessing we have been able to achieve that objective andthen some, well that's great. So for the benefit of the audience structureas we're going to discuss it today, I'm going to define is the way we deployour resources and resources are financial, their people, theirintellectual property, their facilities, equipment and and also our time and soanything that we do that directly affects the deployment of those, wewould say as part of the structure, are you okay with using that as adefinition? Yes. Okay. So where do you see the connection between the strategyof the business and the structure that the business uses? If any? You know,it's, it's really a, it starts with vision and it starts with theindividual that is going to push the...

...organization whether um he or she isready to satisfy the vision. You know, a lot of times I have found with ourclients that varied from, you know, eight employees, mom and pop shops upto really Fortune 500 companies in the small to mid size business. Um Somebodystarts out with an idea but they're they're they're built wrong for it.They're they don't have the right financing or they outstripped theirgrowth is so fast, they've outstripped the finance, they don't have enoughmoney to sustain. They run out of skill set and they're afraid to hire somebodyelse in. So you can't say it's one or the other, it is an integrated approachof all those items, all the laundry list that you you listed at, you yougot to know where you're gone, you got to know how you're going to get thereand you better have the tools to achieve it. Do you think someorganizations have a structure by default or do you think they trulydesign it most have a structure by default? Why do you think that is? Youknow, because I don't, I'm not sure that a lot of people in the earlystages of an organization really understand that and you know, the bestway I can talk about it is a little bit about myself early on in uh in ourformation of the company and the growth, I knew exactly what we needed toachieve. I had a very definitive cash flow plan and a growth objective and Isent my first uh stake in the ground at nine months. I knew where I had to beat nine months to achieve the next level. But then I I kind of got into aquandary where you know, I had to transition from being the top sales guy,you know, head hunt, show chair leader into being a Ceo and that was a verydifficult transition. So that's all part of what what I hope you're leaningtoward a structure And those are very difficult transitions. We probably hadto remake our organization in a major way four times through a 20 plus yeartrack record. Is it easier to change your strategy or your structure? Uhthey go they go hand in hand. The strategy must evolve with theobjectives of the business. You know, we we actually we would actually doconsulting and you know, there's actually a book after this. What gotyou here won't get you there. I think it's Goldsmith that wrote that book, ifI remember correctly, you know, I got it over there on the bookshelf, but Idon't know, I think that's who it was, but it's it's it is a fundamentallyimportant idea for the organization to be able to adapt through the phases ofgrowth or the phases of downturn. Right? Right. The reason I'm questioning thisabout structure or strategy, because I've always had the opinion that I candecide that I'm going to change the direction of the company intellectually,very quickly. That's a that's a decision that can be made in a periodof you can almost say seconds, we're going to get bigger where it getssmaller. That's not, that's that in and of itself is not a long time to makethat choice if you choose to be quick about it. But if once I say I'm gonnaget bigger, then I have to have a structure that supports that and theability to make that change I've always...

...found is infinitely harder, then thedecision to run the business differently strategically. So that'sthat's in my mind, that's how I've seen it work. Well that's that's theexecution of the strategy. Um and the reality of it is the ceo the leader isnot the one that executes the strategy, right? He preaches the strategy, hecheer leads the strategy. He or she goes out and talks to people all thetime about what the strategy is in the UAE. But the belief must be pushed downinto, into the front line because that's really what controls the toneand temperament and pace of the company. If you don't get people to believe thatit's not gonna change. If in your in your work with your clients, forgettingnow your own organization. Did you talk about? Did you use the word structureor did you simply talk about, you've got, you've got the wrong person inthis role or you've got, you don't have enough salespeople. So did you talkabout the components of the structure or did you use the term structure inyour conversations with clients? We didn't use the term structure. Uh, wewould explain it in terms of a story, right? It's always a story, is alwaysmuch easier to understand and I would use it from an inventory managementperspective, right? If you want to build something, if you're a carmanufacturer, you're a small shop and you want to build an engine, you betterhave all the parts in the parts room to build the engine, you can have the bestplan in the world, you can have an idea, you can have everything else. But whenyou go to the parts room, you open up the door and you look at the parts room,If you don't have the parts, you're not building the engine. Okay. So after youlay out the strategy, then you better align the structure right? Which is theparts in the parts room to be able to accomplish that and that that impactspeople. And that's a very difficult accomplishment if people feelthreatened by the change, is it harder to change structure? The bigger thecompany gets? Oh yeah, because people get embedded, they take ownership intheir role in their position. And when you start to move pieces around, peoplestart to look over their shoulder and go, what's coming, who's next, what'shappening? And that again, I'm gonna go back to leadership where its leadershipsubjective to speak to the vision and the objective and the why. Um andyou've got to talk about it, you've got to talk about it more and you got totalk about it more and you got to talk because it gets distorted, right? Itgets distorted and it gets tweaked by everybody through their own lens, rightthrough how they see what's going to impact them is how that vision getstweaked. So when we would go into clients and help them, I'm gonna sayremove roadblocks because that's really what they are, the roadblocks. Yeah, Ithink it's an analogy, You know, we wouldn't, we would start withleadership, but then we would go all the way down, we go three levels downand talk to people and and try to see if they understand in a concurrent in areal time what the leadership is talking about. And most of the timeit's, you know, it truly is sending a secret around the room. It gets yourconvoluted. No question. It's convoluted because everybody tweaks itjust a little bit not on, sometimes on purpose, that's a different issue, butmost of the time, not because they want...

...to, but because that's their world view.Yes. Yeah. It's I found it to be very seldom. Is it intentional that somebodyis trying to fight what you're asking them to do in termsof running a better business? They if they if they're fighting it, it'sbecause either they don't understand it or they feel threatened and most of,you know, the number one is threatened and that threatened that that feelingof being threatened is created by uncertainty. So if they're not sure where theorganization is headed and how they are going to fit into the future, right? Ifyou leave that open, they become threatened and they'll becomeprotective of their spot because we all have families and mortgages andobligations and and just for our listeners. Another thing to keep inmind when you what we're talking about here is some level of confusion that anindividual would have or a team could have about what's going on and asconfusion goes up, individual and team's abilities to focus goes down,right. And and and with, with with when there's an inability to focus, thenproductivity is going to suffer. Quality is gonna suffer. It's just abad bad news all the way around. So the advice bills giving about starting withleadership to make sure that that that communication is clear and understoodand driven throughout the organization is really good advice based upon whatI've seen. And we would talk about the parking lot vetoes explain, you know,typically when an organization is going through change or somebody wants toaccomplish something, they lay out a plan and there's, there's a group of,you know, the front line that you're, you're talking to, there's can easily become someone inthe group that says, hey Ed, did you agree with what he was saying? You know,did you understand that? You know, I'm not, I'm not really sure that I I'm onboard with this because maybe I don't understand. So why don't you? And I, acouple of guys go out and get a beer after work, let's go out and talk about,you know? Mhm. And uh, then the pot gets stirred. Oh, boy, right, that'sthe parking lot vito, and again, it's not necessarily malicious, but it sureis harmful. So I was doing a session one time, uh with a bunch of citybureaucrats. And so I used that as kindly as I cansay, and there was a gentleman who was with the local sheriff's department Hecame in with his gear on his gun and his, you know, his cuff still hangingon. He thought he and and he said, I disagree with that. That would neverhappen in my organization, right? Because there's a chain of command andI'm in charge, you know? And so we did a role play around that and he realized how quickly something canget out of bounds because chain of command doesn't do it correct doesn'tchange how people feel. No. Or how they interpret what they're told, how theythink about it, how they're going to execute their role individually withoutclear definition of objective and why did you have a checklist of how todecide how ready an organization was...

...for change of any kind? Very much so isyou do you recall any of the steps or the components of it of what that wouldlook like? There was a formula. So let me say thatit's it's not magic really. It's it's just process and that the process was done throughinterviews through one on one interviews with a variety of people tofind out if they were really aligned with the overall culture of theorganization first, right? Because every company, every company is uniquein its culture. Every company has a unique fingerprint and is created bythe organization. So any kind of change has to work within that culture. So ifa culture is set up with one of autocratic leadership, top downleadership change is going to be very difficultbecause people are going to resist because they're not part of it.Likewise on the other side, if it is complete, if the leader is neveraccountable and always moves everything out to their subordinates because theynever want accountability, that is also very difficult. So, so someplace in themiddle when you find out that the organization is pretty healthy and thetrust level is high, they're more ready for change than any of the other peopleany of the other organizations on. So, so it's really a measurement of trustand of social network explain that, please. So there's a higher, you know,there's a hierarchy, right? There's a, you know, an ordered chart, but the orchart done, get stuff done. The social network and a company that gets stuffdone. And a lot of times it's the unofficial or or anointed leaders thatmove an organization forward because there's high trust among their coworkers. So when when somebody is having a problem with something, theywon't necessarily go to their leader, but they'll go to somebody who's kindof a maybe a senior coworker and go, hey Ed, how's this? Can you explainthis to me? How's this work, right? That kind of social system is whatallows organizations to move forward. So as part of our effort, whenever wewere doing, we we want to find out who those anointed leaders were. Yeah,because that's who he focused on in the military. Those are the sergeants. Thatmight be, yeah, in the military that, you know, the captains, Lieutenants arethe formal leaders. But the enlisted people, the people who are theindividual contributors. Oftentimes. And I'm based in this on not onlypersonal experience, but people I know who are ex military, they would say youhad to get the sergeant's onboard and once they got on board, they would geteverybody else on board. Yeah. But these were the influential people andthat's what you're talking about. It. Go ahead. But it's amazing how manyorganizations don't know who those people are. They don't think about it,right? Those are the steadies. Those are the people you better have tuckedin your back pocket. Yeah, Yeah. And I would even go so far built on my ownexperience, I would invest time and energy with my thought leaders. Yeah, Iwould I would try to make a deposit in that relationship well in advance ofany time I was going to make a withdrawal. Because there are gonna betimes where you need the benefit of the doubt you need to say trust me. And ifthose people aren't, you know, in a...

...position where they can uh, you know,take your word for the intent. It has, that. It's just gonna be good for youand for the organization, you're gonna have problems. So whatever changeyou're gonna go through is gonna be much tougher. So it's gonna be reallyhard. The and the other part of that change and I'm going to go back to theparts room analogy is talent, you know, we've all read this stuff,you got to have the right people in the right seat on the bus, but it's reallymore complicated than that because there's ego involved and too oftenmidsize organizations, I think the hierarchy, they're the smartest peopleand a lot of times they just really aren't the smartest people and youbetter you better be hiring talent if you're gonna you're gonna drive change.And and for a lot of leaders that that is their ego gets really bruised well,and, and I see that I'm going to make a gross generalization, but I tend to seethis more play out in professional services companies than I do anywhereelse. So when, when degrees and knowledge work is the primary uhexchange of value for the organization, then people will put a lot of credenceon the fact that they have multiple initials behind their name and all thatkind of stuff, you know, on the consulting side, it took us a lot ofmoney to learn that we, that phds were not very very good at really anythingother than academics and we hired some very high, very highly qualified, veryhighly credentialed credentialed people are our mutual friend dr ted Prince wasone of those guys who spoke the blasphemy of, there is no correlationbetween education, formal education and the ability to make money. And uh, andyet I've seen it proven out time after time, time and time again, you know,it's Oh, it they can't they? The majority. Yes, yes. Not all right. Theycan't function in, in the, you know, sometimes in business you gotta getdown in the dirt, you know, you gotta it's how do you know if, for example,if you've got just let's just talk about people right now, how do you,what would you would tell you that? You should consider the fact that you'vegot the wrong hierarchical structure for a business that you have either toofew people reporting to somebody or too many that that that you need uh tooperate by business unit rather than by functional structure. I'm just curiousabout. Are there clear symptoms for that? Because in my mind, that's whereoftentimes there's this confusion about what a problem are we really addressing?Is it a symptom or is it the problem? You address it after you've waited toolong? Is the common b why is that the truth? And I'm no different? You know,I I am, I'm no different. You know, I I had those problemsrepeatedly and it every, I don't know anybody that has, in my experience, Idon't know anybody that has done it proactively, you know, to got, you know,to get to to be able to eliminate a problem person. I just, you don't knowuntil it starts to fester.

There can be hints, but you know, likemost humans, we tend to anybody that made the decision to bring that personon is going to rationalize their decision. Most of the people that Iknow of including myself have always waited too long to eliminate a problemperson or address a set of circumstances that should have beenaddressed earlier. Yeah, the only problem is you only learned that onhindsight it's really hard. And I would say that bias that we would have abouthoping that we made the right choice in an individual. We would first maybe saythat the system or the process is broken before we would say it's theperson. Yes, yeah. You know, I had a person that the one of our financepeople said they thought he was misappropriating funds and I went way,no way you've made a mistake on those credit cards, you know, that's justimpossible. Right? No way. This guy lives in a big house in New Albany. Youknow, I I had to hire a forensic accountant to come in to track down themoney that mysteriously disappeared, yep, before I would believe becausethis guy came really highly recommended, you know, and well connected and I'mlike going, what, what do you mean? You know, it's just, you know, and jerrysays that's my biggest weakness is I trust everybody, right? So jerry's mywife by the way for the crowd, you know, and I do because that's how I tend to,you know, live life. I that I think it's a very positive trait. Well, let'swork coming up against our window of time to finish this up. If somebody, ifsomebody is going to optimize their ability to execute their strategy, isthat something that they should just do all the time, is question that, or isthat something that you do more on, like on a quarterly basis? You and theexecutive team sit around the table and talk about how effectively are weexecuting? How efficiently are we executing? I'm, I'm curious aboutwhether it's an activity that's separate and discrete or if it's justpart of the ongoing operation of the business, it's part of the ongoingoperation of the business. And anybody who's been around long enough knowswhen the business is humming when things are working and things arerolling and, you know, it's working. And, you know, there's not a lot ofconflict in your supply chain and your productivity is right. And you don'thave a lot of customer complaints. It's a very holistic system that needs to,you need to have your ear to the ground all the time too, that, and with thelevel of technology that is available right now, it's much easier than whenyou had to do it by, you know, put your finger up to the wind and putting anear to the ground and you know, looking at, you know, the financial reports areonly history, right? You gotta do it really on a concurrent basis as rapidlyas everything works in today's business environment. But you got to do it bytalking to people, right? You gotta go talk to your front line. Is this workand you get support here. You get support here or their problems here.You get this listen to client comments. I mean, it's gotta come from all at all.Those avenues tell you whether the business is coming. Excellent.Excellent. He's Bill Hunter. He's a...

...treasured resource to at Eppley andhe's a great friend. He's a good man Bill. If people would like to know more,we want to reach out and talk with you at all. What's the best way for them toreach you? You know, really? Probably email that be Hunter 50 and Hunter is HU T T E R. So once again be Hunter 50 at A. O. L. Old school. Yeah, I got oneof those yet, you know, too damn hard to change. Yeah, I hear you. Bill,thank you so much as always a lot of good ideas and help. We'll certainlylook forward to your next visit to the employee experience. Thank you. And Ihope it's been helpful. Thank you very much. All right take care. Yeah. Thank you for listening to the Ed Epleyexperience For more information on building a more sustainable, smarterand healthier business, visit www. The Epley Group dot com for resources tipsand Ed's latest blogs. That's the Eppley e p p l E Y Group dot com. Plustake a free assessment at the EPA group dot com slash assessment to find outhow you measure up as a highly skilled and accomplished manager and where tofocus on improving your skills.

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