The German economy is in transformation – in almost all industries. Are management teams, organization, processes and culture properly positioned to handle the transformation? Investors and family businesses in particular are asking themselves this question. A management audit can be a good, but also risky method to assess the future viability of an organization. A cautious but holistic People & Culture Health Check can therefore be a good alternative.

 Audits within Management

There are many occasions for management audits: Change of strategy, change of management board, entry of an investor, mergers and acquisitions, inter-nationalization. The generational change at the top is often followed by a change at the next management level. Because the question is almost always: Can the second and third management levels achieve and implement the necessary transformation? Most companies have grown organically over a long period of time. Whether it is a family business or not, there is always a long history behind individual managers that tells of exceptional performance, high loyalty and trust. There are personalities around whom organizations have been ‘built’. The success of the past legitimizes some staffing. And in the case of strategy changes, doubts arise: Do these people really have the skills and the will to proactively support the strategy change?

Externalization of personnel decisions

Almost all major search firms offer them: Management Audits. Usually a combination of competency-based interviews with two partners, supported by personality tests. Often combined with the collection of references. The procedures are almost all valid and give clear answers: a personal report is produced, a summary assessment on a performance potential portfolio – or ‘heat-map’. Who is ‘Star’ and who is ‘Questionmark’?  Market comparisons with benchmark data from consultant portfolios provide the answer. Usually there is a feedback meeting with the evaluated candidates. I have conducted many such audits myself – and I am still happy to do so as an external assessor for other consulting firms. And I myself was a candidate for assessment several times during my time with the company.

 Audits have side effects

But medium-sized and family-owned companies in particular shy away from such audits. And they are right to have reservations: A management audit is always a harsh intervention with side effects. The following old pedagogical metaphor illustrates the problem: ‘The father wants to know which of his three sons is the best soccer player and has them compete against each other. The mother, on the other hand, does not want to risk two losers. She avoids the comparative confrontation, looks rather at their strengths, promotes them specifically and thus awakens the individual motives.’

Audits create winners and losers. They are always a cultural signal: now comes the external yardstick! Everyone in the company then knows. An evaluation ‘not only from the outside – but from the top down is that’, a manager once said to me. ‘Is the consulting firm really so neutral and objective, if it also fills vacant positions on the other side? Are all competencies that are really relevant for this job really recorded – or only a formal competency scheme applied? And anyway, what kind of cultural signal is this sending to the entire team: Don’t they trust us anymore? And afterwards we are supposed to work together again as a team in a spirit of trust? Or Nobody asks why I do it this way – and what my vision is’. There is no doubt that an audit is a serious systemic intervention – with side effects.

People & Culture Health Checks

There is a different format for getting answers to the burning questions: Can my management team deliver the transformation? Who has what strengths, potentials and motives? Where are competencies missing on the path to the future? How trusting and dynamic is our culture? Where do we need to complement each other and develop our competencies to achieve the goals? We developed the People & Culture Health Check to get clear answers to these questions without destroying too much trust. By openly involving managers (and also employees) in this self-assessment process. We also conduct 1.5-hour interviews with managers and also employees, in which we use a customized guideline. We ask critical questions, create a change of perspective and listen very carefully. And we have a holistic view of how strategy, organization, processes, cooperation, leadership and culture are viewed. And we also critically question individual competencies by stimulating and challenging self-assessment.

A holistic picture emerges

In this way, a holistic picture of the strengths, potential for improvement, risks and opportunities of an organization – but also of the managers involved – emerges in a short time from many individual discussions. And this is exactly what we reflect back – in a workshop with the management team. Although we guarantee the respondents anonymity via individual statements, we still get a clear picture, including individual competencies and potential for improvement. We process these findings into a forward-looking concept that also includes individual competencies and leadership skills. In consultation with the people concerned. And embedded in the new strategy. But the whole thing is done openly and, above all, appreciatively. The result is a holistic, self-critical, but solution-oriented view of the entire management team and each individual manager. Without secret documents and dossiers.

 Supplement ‘hard’ facts

Such a People & Culture Health Check does not have to offer a purely qualitative result. Precisely because we take an appreciative and solution-oriented approach, this attitude also supports the use of tests with evaluative key figures – such as personality tests, a 360° online feedback or a culture assessment. The decisive factor is that the focus is on the realignment of the organization and that everyone involved is treated in a balanced and respectful manner and can contribute to the assessment and realignment.

What are the results?

  • Holistic understanding: After about three weeks of analysis and a leadership workshop, everyone understands what changes are needed in organization, processes, leadership, competencies and culture, and why.
  • Self-critical reflection: Properly facilitated, the process causes leaders to self-critically examine their own capabilities in light of the realignment.
  • Concrete measures: The management team works with us to identify concrete focus topics and measures that lead to a roadmap.
  • Leadership team development: The leadership team is aligned and united through the process and also shares painful decisions.

 

People & Culture Health Checks can be modular, linked to a variety of other initiatives and tools.

 

Alexander Gisdakis