The German economy is undergoing transformation – in almost all sectors. Are the management teams, organization, processes and culture set up correctly to manage the transformation?
Investors and family businesses in particular are asking themselves this question. A management audit can be a good, but also risky method of assessing the future viability of an organization. A careful but holistic People & Culture Health Check can therefore be a good alternative.
Audits in management
There are many reasons for management audits: Change of strategy, change of board, entry of an investor, mergers and acquisitions, internationalization. The generational change at the top is often followed by a change at the next management level. This is because the question almost always arises: 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 a family business or not, there is always a long history behind individual managers that tells of exceptional performance, loyalty and trust. Some organizations have been ‚built around‘ personalities. The success of the past legitimizes some appointments. And when it comes to changes in strategy, doubts arise: do these people really have the skills and the will to proactively support the change in strategy?
Externalizing 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 provide clear answers: the result is a personal report, a summary assessment on a performance potential portfolio – or ‚heat map‘. Who is a ’star‘ and who is a ‚question mark‘? Market comparisons with benchmark data from consultant portfolios provide the answer. There is usually a feedback meeting with the assessed candidates. I have carried out many such audits myself – and still enjoy doing so as an external assessor for other consulting firms.
And I was also an assessment candidate myself on several occasions during my time at the company.
Audits have side effects
However, SMEs and family businesses in particular shy away from such audits. And they are right to have concerns:
A management audit is always a harsh intervention with side effects. The following old educational metaphor illustrates the problem:
‚The father wants to know which of his three sons is the best footballer 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, instead focusing on their strengths, promoting them in a targeted manner and thus awakening their individual motives.
Audits create winners and losers. They are always a cultural signal: here comes the external yardstick! Everyone in the company then knows. An assessment ’not just from the outside – but from the top down,‘ a manager once said to me. ‚Is the consulting firm really so neutral and objective if, on the other hand, it also fills vacant positions? Do they really record all the competencies that are really relevant for the job – or do they just apply a formal competency scheme? And what kind of cultural signal does this send to the entire team: do they no longer trust us? And afterwards we are supposed to work together again as a team in a spirit of trust? Or ‚Nobody asks why I’m doing it this way – and what my vision is‘. So there is no doubt that an audit is a serious systemic intervention – with side effects.
People & Culture Health Checks
There is another format to get answers to the burning questions: Can my management team deliver the transformation? Who has which strengths, potential and motives? Where are skills 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 skills in order to achieve our goals? We have developed the People & Culture Health Check to get clear answers to these questions without destroying too much trust. By openly involving managers (and employees) in this self-assessment process. We also conduct 1.5-hour interviews with managers and employees in which we use a customized guideline. We ask critical questions, create a change of perspective and listen very carefully. And we take a holistic view of how strategy, organization, processes, collaboration and leadership culture are viewed. And we also critically scrutinize individual competencies by encouraging 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 from many individual discussions in a short space of time. And this is exactly what we reflect back – in a workshop with the management team. Although we guarantee the interviewees anonymity with regard to 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 covers individual competencies and leadership skills. In consultation with the people concerned. And embedded in the new strategy. But the whole process is open and, above all, appreciative. 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.
Adding ‚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 a personality test, 360° online feedback or a culture assessment. It is crucial 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 themselves.
What are the results?
- Holistic understanding:
After about three weeks of analysis and a leadership workshop, everyone understands what changes are necessary in terms of organization, processes, leadership, skills and culture and why. - Self-critical reflection:
Properly moderated, the process causes managers to self-critically place their own skills in the perspective of the realignment - Concrete measures:
The management team works with us to identify specific focus topics and measures that result in a roadmap.
Management team development: The management team is aligned and united through the process and also supports painful decisions together.
People & Culture Health Checks can be set up on a modular basis and combined with a variety of other initiatives and instruments.
