The Cost to Organisations of Being Unfocussed

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Home > Articles > The Cost to Organisations of Being Unfocussed

 The Cost to Organisations of Being Unfocussed

Antonio Nieto-Rodriguez | Today's Manager
March 1, 2015

If top management does not encourage their staff to focus on key tasks and priorities, the organisation may fail in achieving business success.

 
LACK of focus is a hindrance organisations face in achieving their strategies. A recent study from Harvard University’s happiness experts, Mr Daniel Gilbert and Mr Matthew Killingsworth, shows that human beings are by nature unfocussed.
 
At any point, an average of 50 per cent of the population is not focussed on what they are doing. In addition, 30 to 40 per cent of an employee’s time in the workplace is spent tending to unplanned interruptions and then reconstituting the mental focus that the interruption caused. This was not the case 20 years ago, simply because the tools of interruption were not so plentiful.
 
Prioritisation and Focus Starts at Top Management
Without focus, a company cannot achieve an execution culture. Unfocussed companies pursue too many objectives and have too many initiatives. During the workshops I conducted with senior managers, I asked them to list their company’s top three objectives. There was never a unanimous list. If top management is unclear about the initiatives in which to focus the company’s efforts, then staff will never know where to invest their time.
 
In Figure 1, the greater the number of strategic objectives and priorities, the more unfocussed the employees become. Alternatively, if top management is more focussed, the employees and departments have a clearer understanding of what they need to do on a daily basis. When priorities cascade down the organisation, the result is often a distorted focus. Frequently, there is a significant distortion of focus when priorities are cascaded down to the organisation. The situation might be similar to that shown in red in Figure 1.
 
 
Figure 1: Consequences of a Lack of Priorities at the Top of the Organisation
Another significant consequence is that lack of focus leads to lack of discipline in executing organisational objectives. Focus imposes discipline because employees at any level know what to do at any point.

A final sign related to the lack of focus and execution culture is when companies brainstorm the same new ideas again and again. Decisions are either not made; or when they are made, they are continuously refined before they are carried out. I am not arguing against brainstorming. On the contrary, it is a positive way to involve the entire organisation in decision buy-in or in obtaining broader points of views. But brainstorming on a new initiative or on the overall strategy should not take longer than a few weeks. Afterwards, management is responsible for making decisions.
 
Impact of Lack of Focus on Productivity
It is difficult to estimate the waste that is created by unfocussed companies and employees. To come up with a rough calculation, I took a simple measurement of labour productivity1, such as the ratio of the real value of the company’s output to the input of labour (hours worked). To keep things simple, I excluded the qualitative aspects of labour productivity, such as creativity, innovation, teamwork, and improved quality of work.
 
The following is the sample productivity calculation, which applies primarily to run-the-business activities:
  • Units produced: 10,000
  • Standard price: 80€/unit
  • Labour input: 1,000 hours

In a focussed company, the work is done in half the time, thus 500 hours.

  • Cost of labour: 40€/hour
  • Cost of material: 2,000€
  • Cost of overhead: two x labour input

Table 1 shows that an increase in employee focus directly affects the overall productivity (almost doubling) of the company by increasing the output, lowering the production costs, or even reducing prices.

Table 1: Productivity Simulation

Improved focus will increase productivity by:

  • Significantly decreasing the company’s projects (cost reduction),
  • Improving the selection of those projects that will bring the highest return to the business,
  • Adjusting the organisation to facilitate the execution of projects, and
  • Helping the allocation of the best people to the most strategic and important projects, which increases the probability of achieving results and attaining them more quickly.

Unhappy, Unengaged, and Unmotivated Staff
One of the most dramatic consequences of being an unfocussed company is the impact on employees. The lack of clear direction and priorities causes employees to be unhappy with what they do, because they do not understand how their work contributes to the company’s goals. Employees who are working on projects feel that management disregards their issues or achievements. They choose to work only the number of hours stipulated in their contracts, or they might even start to be absent regularly. Consequently, unfocussed companies do not get the most out of their staff.

Why Being Focussed Improves Strategy Implementation
Being focussed improves the way organisations implement their strategy because we live in a world filled with distraction. The levels of distraction today are much higher than they were 20 or 30 years ago. Today, there is an overload of information, technology, pro-ducts, services, telephones, and E-mails. In addition, people seem to have busier personal lives now. Our lives pass by quickly, and we have too many things to do but not enough time to do them. As employees are the most important component of an organisation, the complexity of their lives affects the company as well.

The good thing about being focussed is that it sets priorities and boundaries for both organisations and individuals.

For example, a friend of mine is a partner at PricewaterhouseCoopers (PwC). She prioritises her work based on its importance to the firm. Often, she starts with client work. When she is focussed on a task, her team knows that she cannot be interrupted. In meetings, she is present, participates actively, and is never distracted by activities such as glancing at her smartphone. She is also focussed on her specialisation, which has been Treasury since she began as an auditor with PwC over 20 years ago. As she has never changed her area of concentration, she has become one of Treasury’s global thought leaders.

The same applies to organisations. For example, when Mr Steve Jobs returned to his old job at Apple Inc. in 1997, he decided that in order for the company to stay alive, it had to focus on what it did best. He decided to concentrate all of the company’s energy on just four products, two laptops, and two desktops, and to cancel all the other unrelated initiatives, projects, and products. His strong focus was transmitted to his team and then in turn to the entire organisation.

In fact, I can make a strong statement based on my many years of observation—every business is focussed when it is just starting up. Those companies that ma-nage to stay focussed will succeed and stay in business. Those that do not stay focussed will probably fail. The problems start when companies grow; at that point, remaining focussed becomes very difficult. Management changes and they want to introduce new things, thus decreasing the focus, and it becomes a vicious cycle which is very difficult to break.

Discipline and Order
Nature tends to disorder, and being focussed requires discipline and order. Focus requires energy and effort. We humans have mixed feelings about expending energy, even if we know it will bring us pleasure. For example, in the Harvard study, the second-highest-rated activity in terms of providing happiness was physical exercise. How many of us avoid that?

If top management does not encourage their staff to focus or even impose focus on key tasks and priorities, the chances are very high that the employees’ minds will wander during their working hours. They may work on tasks that they think are important, which often are the easier tasks; may respond to E-mails; and may spend most of their time in meetings. Even worse, the lack of focus can lead to staff wasting time on the Internet or taking care of personal matters.

References
1 “Productivity and Costs by Industry: Mining, Wholesale Trade, Retail Trade, and Food Services and Drinking Places Industries, 2013”, Accessed via http://www.bls.gov/news.release/prin1.nr0.htm

PHOTO: 123RF

 

​Mr Antonio Nieto-Rodriguez is an expert in strategy execution and project management. He is head of Transversal Portfolio Management at BNP Paribas Fortis, where he deals with prioritisation, selection, and execution of large strategic projects. He is also the author of The Focused Organization and is a part-time professor in Solvay Business School where he teaches strategy execution and programme management to MBA students.

 

Copyright © 2015 Singapore Institute of Management

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Today's Manager Issue 1, 2015

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