This document discusses how sustainable behavioral change is key to competitive advantage and growth for organizations. It notes that growth is related to an organization's ability to develop and implement strategy, innovate, improve performance, and solve problems effectively. The document outlines how adding people and complexity can increase transaction and mistake costs for organizations. It emphasizes that no matter an organization's financial resources or promising products, sustained behavioral change is the critical constraint to growth. It suggests organizations achieve the results their systems and structures are designed for, and that changing results requires changing systems. The document provides guidance on clarity, alignment, and integration to create sustained behavioral change through improved strategy, assumptions, structures and behaviors.

1. GEAR UP and GROW
Sustainable Behavioral Change as a
Competitive Advantage

2. Rate and Degree of Growth related to How Fast You
are able to...
• Develop & Effectively Implement Strategy / Initiatives
• Innovate
• Improve Performance & Productivity
• Solve the Right Problems Really Well (& Avoid Solving the Wrong
Problems Really Well)
Business Performance
ha via
e
ng
rC e
vio tag
ha an
Be Adv
ine itive
sta et
d
Su mp
Co
Time

3. Add People, increase
Complexity geometrically. +
250 - 800
100 - 200
40 - 70
7 - 12 • Increase in interfaces
1- 5 Emplys creates increases in
Transaction Costs & Mistake
Costs
Need:
• Leadership
• Systems & Structure

4. No matter how much financial power you
have, or how promising your product or
service is, the critical constraint to growth is
how well you are able to create sustained
change in behavior.

5. Every company achieves Exactly the Results
it’s System & Structures allow it to Achieve.
A system = an inter-related, interconnected set of components
working together to achieve a common purpose.

7. Every system works perfectly.
It always achieves the goals it’s designed to achieve.

8. If you want different results, you have to
change the system.

9. “At some point in the
life cycle of virtually
every organization,
its ability to succeed
in spite of itself runs
out.” Brein’s Law

10. “At some point in the
life cycle of virtually
every organization,
its ability to succeed
in spite of itself runs
out.” Brein’s Law
“The definition of
insanity is doing the
same thing over and
over again and
expecting different
results.” Albert Einstein

11. Clarity
Alignment
Integration

12. Clarity
• Strategy
• Assumptions
• Value Chain
• Behaviors

13. Lost in (Strategic) Translation

14. What are the fuzzy words in your Strategy?
In the way you manage performance?
Lazy Customer-focused
Uninspired
“To be the best”
Sell more.
A ‘real go-getter’ Not fast enough.
Be a Role Model. Be more commercial.

15. When was the last time you tested your
assumptions?

16. Drives Results.
Your Behavior...
Drives Behavior.
Your Structures...
Drive Structures.
Your Rules...
Drive the Rules.
Your Assumptions...

17. Assumptions
Wrong Assumptions Wrong Decisions
Wrong Decisions Wrong Actions

19. Assumptions
Fail to challenge your assumptions, you may discover - too late -
they are out of date.

21. Conflicting Assumptions
The path to organizational sluggishness & stagnation.
Where in your company’s causal linkages are its assumptions
invalid or irrelevant?

22. Increased
Spend more money
Sales
(eg. on advertising)
Revenues
A
Conflict
Profitable
Company
Control DON’T spend more
Costs money

23. ASSUMPTIONS
Increased
Spend more money
Sales (eg. on advertising)
Revenues
A Profitable Conflict
Company
Control DON’T spend more
Costs money
ASSUMPTIONS
Which Assumptions are Invalid?
Which Assumptions are Valid but Irrelevant?

24. Alignment
Visible Structures
• Policies, processes, rules, programs, functions, etc.
Invisible Structures
• Interpersonal relationships, power dynamics, conflict, etc.

26. Org Design for Top Performance: Clarifying, Aligning, & Integrating
Input Transformation Output
Market Context
• Customer Requirements Managing the Work
• Competitive Pressure The Way of Working •
• Org Structure
• Market Pressure Tasks
• Governance: Decision-Making & Conflict Resolution
• Social, Political, • Job Design & Tools
• Accountabilities & Responsibilities
Environmental, Legal • Work Flow & Value Chain
• Measurement & Feedback system • Products
Expectations & • ‘Embedded’ Information & Feedback
• Compensation & Rewards (including non-monetary)
Constraints • Improvement (Waste - , Revenue+)
• Alignment / linkages in goals across levels and teams • Financial Results
• Boundary Management
• HR Management (selection, training, etc)
• Inventory Management
• Performance Improvement Process • Impact on Society
Resources & Environment
• Suppliers, Competencies,
Requirements, Constraints Critical Management Tasks • Customer
• Raw Materials Engagement
• Employees Product Development
Problem-solving task, running from concept • Resource Utilization
Behavior, Capabilities, through detailed design and engineering to
Perceptions production launch. Flow/Concurrency • Adaptability/Agility
Organizational DNA
• Vision & Purpose • Executive Team
Cash Management • Employee
• Values, Assumptions, • Leaders Order Taking •Assumptions
•Leadership System Information Management task, running Engagement
Norms •AR/AP Policies
•Succession from order-taking through detailed scheduling to
• History & Previous •Sales Behavior
• Teams delivery. Pull
Experience
• Managers
• Employees
Production
Physical transformation task, proceeding
from raw materials to a finished product in the • Waste
hands of the customer. Flow
Strategic Context • Obsolete policies,
• Strategic Assumptions procedures,
• Aspirations process steps,
• Strategic Decisions & Information & Informal Organization
• Actual (versus Espoused) Behavior measures, etc.
Objectives Knowledge
• Value Network (Informal Work, Communication,
• Tactical Plans & • Communication processes and
Problem-solving, value creation) & Key Nodes
Objectives patterns - formal
• Informal Roles
• Process to develop & • Information exchange
• Informal Rewards
agree on strategic & • Knowledge capture, storing, and
• Power & Politics
tactical plans sharing
• Inter- & Intra-group relations; Worth & Security
• Technology as connector and enabler
• Communication patterns
• Artifacts

27. Are you allowed to fail?
What happens when someone does fail?
What are the sources of fear in your company?

29. How well do you align you intentions with your behavior?
“Let’s Collaborate & Create a Great Solution.*”
* But I’ll give you only the info I think you need. I’m after that promotion /
bonus. And no way am I going to let you screw this up. Etc.

30. • How often does the leadership team get together to
discuss the key issue? What happens during these
discussions?
• Do people in the leadership team share a common
purpose, language, and mission?
• Are there any gaps in awareness and knowledge?
• Is there a problem with Silo’s across the enterprise?
• Are there multiple views of the issues and possible
resolutions?

31. Individual Business Functions, Value Chain
Integration
Systems Thinking Team Behavior

32. a
brush
An elephant is. . .
a soft and
a rope mushy
snake
a
tree trunk

35. “For every complex problem there is a solution
that is simple, neat and wrong.”
H.L. Menken

36. New What’s the Problem?
Behavior
Solution
What are the Assumptions
& Beliefs Supporting the What’s the Behavior?
Structures & Systems?
What are the
Structures & Systems
supporting the
Behavior?

37. Create Shared, Deep
Understanding of Current Reality
Adjust as Needed or
Develop a Hypothesis
Standardize
Act Plan
Check Do
Measure the Results Implement the Plan

38. Your Next Steps:
1. Challenge your Assumptions & Clarify your Strategy.
2. Challenge your Value Chain and Patterns of Behavior.
3. Challenge your Visible & Invisible Systems and Structures.
4. Challenge how you use your Network; broaden your ‘eco-system.’
5. Create Improvement Plan - Clarify, Align, Integrate.
6. Implement the Plan. Provide new training if needed.
7. Check and Adjust....religiously and quickly.
8. Coach, Teach, Improve the System.

39. Director of Amsterdam-based, internationally-operating
specialty organization behavior & performance
practice, designing companies to unleash top
performance, hidden capital, and energy.
Joe Torrez
A guide to...
Strengthening your Performance Torrez bv
Minimizing your Performance Risks
Realizing your Worth +31 6 3430 5420
Improving your Value
Fueling your Growth Joe@Torrezbv.com
Building a Healthy, Sustainable Business
www.Torrezbv.com
Supporting...
Twitter/torrezbv
Strategy Development
Strategy Implementation
Performance Improvement
Problem Solving
Merger & Acquisition / Integration Support

41. Slide Credits
Slide 17: Schwartz, P. (n.d.) Origins: The Map Rap. http://www.gbn.org/public/gbnstory/origins/maprap.htm.
Slide 19: Napoleon’s Withdrawal from Russia, painting by Albert Northen.
Slide 24: F1 Car. © Will Evans, iStockphoto.com.
Slide 24: Red Tricycle. © Kristen Stewart, Dreamstime.com.
Slide 24: used with permission of Joshua Torrez.
Slide 24: Glancing of Racing Driver. © Fouquin Christophe, Dreamstime.com.
Slide 24: Hispanic soccer of football player. © Suprijono Suharjoto, Dreamstime.com.
Slide 25: David Hannah, David Nadler
Slide 27: The Emperor Has New Clothes
Apologies to those I have forgotten. Not intended for commercial use.