SFO Blog - Helping You Build Your Company into a Strategy Focused Organization

Why Your Employees Don’t Care About Your Business Strategy

A problem I hear frequently from business leaders is that they can’t get their employees interested in, or engaged with, their company’s business strategy. They say that their employees don’t seem to care. When I ask them why they feel this way, they cite lack of interest in participating in strategy information sessions and results sharing town halls, poor uptake of business update newsletters, and failure to look at balanced scorecard results reports as just some of the examples of low levels of employee engagement and interest in the strategy of the company. 

Unfortunately, many business leaders take this apparent lack of employee engagement as a sign that their employees aren’t really committed to the company or that they don’t care about the company and what it takes to be successful. Sadly, this attitude about employees is common in many companies today - many executives have come to the conclusion that employees just don’t want to get engaged.

Armed with the assumption that low employee engagement is an employee attitude problem, the usual solution is to push more, and harder, from the top in the quest to “fix” employees/the employee problem. Not surprisingly, the actual result achieved by these actions is exactly the opposite of the desired outcome. That is, it causes erosion in real employee engagement levels and reduced employee loyalty to the company.

 

Have you ever considered that employees don’t engage with a company’s strategy because they aren’t given the opportunity to engage in, and with, the strategy in a meaningful way in the first place?

And that many employees only APPEAR not to care while they actually really do and management just isn’t giving them a fair chance to show it?

 

Most of the employees I have met in my career have truly wished to contribute to the success of their organization and, when asked, have been more than happy to participate in a dedicated way in their company’s strategy creation, execution, and management processes. In my experience, the barrier to making this a reality isn’t usually employees at all. In fact, the problem is often a systemic one with the organization, and business leaders themselves, putting significant obstacles in the way of employee engagement with the business strategy.

What are these systemic barriers? Let’s look at the four top reasons why companies have trouble getting their employees truly excited about, and involved with, business strategy.     

 

 

Employees Don’t Know What the Business Strategy Is

You’ve heard this one before – only 5% of the workforce in the majority of organizations understands their company’s business strategy. This means that only a fraction of the employees in any given company understand what the business strategy is, what it really means, what it looks like in action, and why (and how) executing the strategy will drive business success - all despite the fact that many organizations hold splashy strategy launch events for their employees and produce beautiful materials that communicate their business strategy.

Despite these efforts, there’s still a disconnect. The primary disconnect for most employees is in the “what it really means” and “what it looks like in action” parts of the equation outlined above. The problem is that most strategies and strategic plans I’ve seen are written at a very high level. They include strategic direction statements like “Focus on Quality Operations” or “Excel at Innovation” and that’s it. While it sounds good and people nod their heads when they hear them, when employees go back to their front line work, you realize that what it means to “focus on quality operations” means different things to different people.

The problem is that a statement like “focus on quality operations” actually doesn’t tell you anything about what the company really means or hopes to achieve through a focus on a specific strategic direction and this leads to a lack of clarity about what it looks like in action. And while many strategic plans include lists of initiatives that support various strategic directions, these lists are actually not very effective in helping most employees see what “focusing on quality operations” looks like in action in their job. This leads us to the next barrier….     

 

 

Employees Can’t See Themselves in the Strategy

If the only way your employees can see the strategy “in action” is through the initiatives that align with each strategic direction, they will only be able to “see themselves in the strategy” if their work includes completing one of the identified strategic initiatives.

In reality, the work of most employees involves completing business processes, not working on strategic initiatives. Actually, most of the work that will contribute to the successful execution of a company’s strategy occurs through business processes. If a company hasn’t mapped its business processes with its business strategy, it is missing an opportunity to demonstrate how to put the strategy into action, and how employees fit in and contribute.

An employee’s work is important to them and they see doing their work as their way of contributing to company success. If employees don’t see how their day to day work (via the business processes they work on/in) fits in with, and contributes to, the business strategy, they can’t see themselves in the strategy. When employees can’t see themselves in the business strategy, the strategy just doesn’t register with them and, as a result, they don’t feel like the strategy has a direct relationship to their work.

Employees see their work as important and when the business strategy doesn’t connect with the real work they do, employees conclude that the business strategy doesn’t relate to/doesn’t concern them.           

 

 

Employees are Incented to Focus on Operations ONLY

Many business leaders and managers believe that employees should focus on their work alone - that is, they don’t need to understand the business and that the work of other departments is just a distraction. In fact, many organizations go so far as to use employee goal and incentive compensation plans to focus employees on operational performance exclusively. In the worst case scenario, this focus on operational results is misaligned with strategic goals and results, negatively impacting the achievement of strategic objectives.

Companies that focus their employees on operational matters only are placing significant limitations on the ability of their organization to achieve business success. For example, when employees don’t understand how the business works, as well as the strategic goals of the organization, they are at greater risk of making operational decisions that have a detrimental impact of the overall success of the company. In contrast, when employees understand the strategic priorities of the entire business and how all parts of the business need to work together to achieve success, they realize that operational decisions made in one part of the company have an impact in other business units and departments and they make these decisions accordingly.

Helping employees understand the relationship between operations and the strategic objectives of the organization allows employees to make more informed day to day business decisions and that always translates into better strategic performance overall. 

 

 

No One Asks Employees Their Opinion or Gives Them the Chance to Participate in the Strategy Creation and Management Process

Why is strategy making and improvement so often considered to be the sole domain of executives and business leaders? Why does the strategic planning and execution process tend to rely on numbers and data almost to the exclusion of the insights and wisdom of the people who are close to the action and the customer (i.e. the employees)?

The unfortunate fact is that the traditional approach to strategic planning and strategy management used by so many companies almost always unfolds in exactly this way with limited involvement by, and input from, a broad range of employees

Many organizations don’t even bother to engage their employees in the strategy making process while others make the offer and then complain that their employees don’t take them up on it. Unfortunately, in many of these cases, organizations don’t take the necessary steps to help their employees participate in strategy making and management activities. Not releasing employees from front line work and not making time for participation in strategic discussions part of every employee’s job are just two examples of the real barriers that prevent employee engagement with a company’s business strategy.

Not tapping into the knowledge and wisdom of a company’s employees during the strategy creation process is short sighted and can be expensive. For example, most customer facing employees can tell executives exactly what the company’s customers need and expect and how the company is doing at fulfilling them. Want to know more about the competition and the trends in the industry? A crack sales force can tell business leaders everything they need to know. With this much inhouse knowledge at hand, why spend the time and money on customer focus groups and analysis by consultants? However, many companies insist of doing just this.

In addition, employees have unlimited ideas about how to actually execute and improve a company’s business strategy. Unfortunately, most companies don’t tap into this critical resource.

Given the potential associated with employee involvement, and the lack of it in most organizations, is it any wonder that employees chaff at executing a strategy that they didn’t have a part in defining and which may not make sense or be easy to implement given the business realities at the front line of the business?

 

 

In my experience, most employees want to engage with their company by getting involved in strategy creation and execution – they really do care about the work of their company and they want it to be successful. The problem is there are just too many obstacles getting in the way.

How can business leaders increase employee engagement with their company’s business strategy?

(1) Ensure that employees have the opportunity, and are actually able, to participate in meaningful ways in the creation, execution, and management of your business strategy,

(2) Translate your business strategy into action via a strategy map and use it to tell your strategy story and engage employees further with your strategy and what it really means, and

(3) Use your strategy map to help employees see how their work contributes both directly (via business processes and strategic initiatives), and indirectly, to strategy execution success.      

 

In the end, it’s important to get your employees involved and engaged with your company and business strategy because, regardless of which business sector or industry you are in, high levels of employee engagement are good for your customers and stakeholders, your employees, and, ultimately, your business.  

 

Is Measurement Really to Blame for Innovation Failures?

Recently, I have seen some suggestions that measurement, and more specifically, the choice of measures used, is a prime driver of innovation failure in organizations. While I agree that innovation can be problematic in organizations, I have to wonder whether when it happens it’s actually a strategy problem (maybe) or a management problem (more likely) dressed up as a measurement problem.

I understand – a lot of people REALLY dislike measurement. Measurement can be very troublesome when it is used incorrectly – to judge, blame, and humiliate people who are working very hard to do the best they can with what they’ve got access to. This is the dark side of measurement. And when all you have experienced is the dark side of measurement then it’s no wonder that people avoid and lay blame on measurement when business problems arise. Measurement is often an easy and visible target in these cases.

However, I worry that this type of response is due to the fact that measurement is largely misunderstood. Here’s what I think.

The purpose of measurement is to: (1) provide useable information and feedback on how business processes are performing, including the results they are producing; (2) provide early warning signals about possible operational and strategic issues; (3) facilitate insights into the cause and effect relationships within the business and how the organization works in an integrated way to produce business results; (4) facilitate organizational dialogue about what’s going on and to set the stage for learning and improvement, when required; and (5) support informed decision-making.

Measurement should NEVER be used to blame people for results because measures are generally designed to provide information about the performance of business processes and systems – not people. When unexpected results and under-performance occur, you likely have a process or system (i.e. organizational, management, accountability, etc.) problem on your hands – not a people problem.

That being said, when barriers to innovation occur in an organization, my experience is that it’s either a problem with the business strategy or it’s a management issue.

 

When it comes to creating and managing your business strategy, it is important to remember that measures are simply the tools we use to represent the key strategic objectives in the business strategy. You see, if you haven’t clearly defined the key elements of your business strategy, then it’s impossible to ensure that it is properly captured by a good measure set. A good measure set includes one or two indicators for each strategic objective in your business strategy – measures that directly or indirectly relate to a strategic objective based on its definition.

Let’s look closer at a business strategy that includes innovation as a key strategic objective. The first question I would ask is: What do you mean by innovation? Is it hard core R & D? Or does it look more like the incremental but important improvements achieved through continuous quality improvement (CQI)? Do you mean something altogether different and, if so, what? It is very important to realize that, if you want innovation to make its way into your measure set, it has to be included in your business strategy AND it must be clearly articulated.

If innovation hasn’t been clearly included in your business strategy and/or described in detail, don’t blame measurement for a lack of innovation. What you really have is a strategy problem.

 

In reality, most companies know whether innovation is an important factor in the success of their business and business strategy. From there, many will include some measure(s) of innovation or CQI in their measure set. So, how does innovation still end up falling by the wayside in some organizations? The answer is management problems.

Failure to execute a business strategy, such as innovation, has three primary management-based causes: (1) lack of, or inappropriate, prioritization and balancing of business objectives; (2) poor organizational alignment; and (3) a failure to build the required accountability structure and culture. 

 

1. Prioritization and Balancing of Business Objectives

What is the relative importance, right now, of your innovation strategy in relation to the other strategic objectives in your business strategy? Is it one of the top 3 – 5 key objectives for the upcoming period or is it lower on the list? It is essential for business leaders to make these prioritization decisions because it is unrealistic to think that all strategic objectives in a business strategy can receive equal work effort at the same time – no company has the unlimited organizational capacity required to do this. Organizations that fail to define, and communicate, these relative strategic priorities make business decision-making difficult for managers and employees, setting the stage for the poor execution of all of their strategic objectives.

Another challenge is being aware of, and effectively balancing, opposing strategic objectives when they exist in a business strategy. Specifically for this discussion, objectives relating to innovation versus those related to risk management/avoidance would be examples of naturally opposing objectives. While the resulting push and pull can be handled through a business strategy prioritization approach, it is often better to soften one objective and strengthen the other through business strategy discussions. This way, the challenge that is faced by trying to implement powerful opposing strategies is worked out before it comes time for strategy execution.  

If innovation is not happening in your organization when it should be, it is important to determine whether the root cause relates to the prioritization of this objective. If innovation is a recognized business strategy for your organization but it has a lower priority at this point in time, you would expect to see evidence of some innovation activity but at lower levels of intensity. If, however, business priorities are unclear in your organization, it is important to determine whether innovation has fallen off the agenda as a result.

 

2. Poor Organizational Alignment

Is innovation, as defined in your business strategy, adequately supported by your organization? That is, does your organization have the organizational structure, business processes, and projects in place to support the execution of an innovation agenda, do employees have the skills and capabilities they need to execute the innovation objective, and are the plans, tools, technologies, and resources (including budget dollars) required to support an innovation strategy in place in your organization? Poor organizational alignment with an innovation strategic objective will prove to be a key barrier to innovation in any organization.

 

3. Failure to Build the Required Accountability Structure and Culture

Who in your organization has accountability for the completion of your innovation strategy? Who is taking ownership for ensuring that the innovation agenda moves forward appropriately? Who is the owner of your innovation processes? Who has accountability for providing the necessary data and performance commentary for your innovation measures? Do the people in your organization display a dedication to action and follow through and demonstrate a shared commitment to seeing that your innovation strategy achieves its desired results? These are all elements of the accountability structure and culture that is required to ensure that your innovation strategy is executed as planned. If your organization’s innovation agenda is falling behind, unclear or undefined accountabilities for action and a poorly developed culture of accountability could be possible root causes.

 

Innovation is an important business strategy for many organizations, however, it is frequently not fully realized. Sometimes, poor measure selection and utilization is identified as the reason for this outcome, however, this is almost always a red herring. It is far more likely that a failure to execute an organization’s innovation agenda is either a strategy problem or a management problem. When barriers to innovation exist in a business, it is critical to complete a root cause analysis and then implement the necessary changes to get the innovation strategy back on the desired course.

Is innovation an important but problematic objective for your organization? Take the time to clearly identify and then eliminate the REAL barriers to success.

 

Is Management Capability Holding Your Organization Back from Strategy Execution Success?

I know - this is a rather indelicate question but it's an important one to answer if your organization is ever going to achieve its strategy execution goals and objectives. So let's proceed....

I think that we can agree that strategy execution excellence is elusive for many organizations at any moment in time. When you ask people what gets in the way of strategy execution success, they usually give you a long list of the typical challenges. While I agree that many things go into ensuring that your company actually implements the strategy you envisioned, I believe that it really comes down to three essential elements: content, infrastructure, and management capability.

What I mean by content is you must have an operationalized strategy with the right planning horizon in place (i.e. a long term strategy with aligned medium term goals), ready for implementation, execution, and refinement. An operationalized strategy is one where the actions required to actually bring the strategy to life are clear and obvious to every employee in the organization. There is no doubt in my mind that the strategy map is the best vehicle for clearly communicating a company’s strategy in understandable, action-oriented terms. However, a strategy map isn’t enough to support strategy execution excellence. Smart organizations will also align their business processes, projects, and resources with their business strategy and share that information with employees and other stakeholders. Aligning these key business elements with strategy serves several purposes: it ensures that your strategy is adequately supported (or not!) by core and strategic business activities and the required resources; and it helps employees connect their work directly to the business strategy via the aligned processes and projects they work in and/or contribute to. Translating your strategy into action is the first essential for successful strategy execution.

Strategy execution excellence also requires a robust supporting infrastructure including: assigned roles for the strategy execution and management process; an organizational strategy execution accountability framework; and a defined strategy governance framework.

Every successful strategy focused organization identifies an executive sponsor for their strategy execution and management activities as well as a strategy execution and management process champion or owner. The role of the executive sponsor includes providing greater insight into and new information on the strategy/strategic plan, and playing a strategy communication role between the executive team and the Board. The role of the strategy execution and management process owner includes: steering the performance measurement framework utilization, expansion, and improvement processes; defining strategy and performance management procedures and policies; coaching employees, leaders, managers, supervisors on your strategy; and facilitating enhanced cross-functional organizational integration and team work. These are the minimum roles required for a robust strategy execution and management infrastructure.

Strategy execution success won’t happen without an accountability framework including clear performance expectations that have been embedded in job descriptions and personal performance plans, and adequate resource supports for the fulfillment of these expectations. A variety of roles support the implementation and management of strategy including strategic objective owners, performance indicator data and commentary owners, project and process owners, and functional subject matter experts, with each making specific contributions to the strategy execution and management process.

The final required infrastructure element is a defined strategy governance framework that details: the performance measurement data and commentary collection process and timelines; regular performance measure review meetings (including objectives, agenda, and participants); regular strategy execution review meetings (including objectives, agenda, and participants); and the strategy change process (including strategic objective, strategy map, indicator, and performance target changes). Putting a certain level of formalization around these components of the strategy execution and management infrastructure increases the likelihood that an organization will actually put their strategy into action.

Much has been written about how to overcome the strategy execution challenge by leveraging these first two elements – content and infrastructure. Less time, however, has been spent on the role of management capability and its impact on strategy execution success. In my mind, there are four management capability pillars that must be in place for a company to achieve strategy execution excellence: committed and active leadership; expectations for accountability; living the strategy; and managing in a new way.

 

Committed and Active Leadership

Every recognized leader in your organization must understand, be knowledgeable in, and be committed to your business strategy, and what it takes to achieve it – even when it is difficult and challenging to do so. Successful companies also ensure that “non-sanctioned” organizational leaders (those people who don’t have formal leadership roles but who others look to and take their cues from) share these same attributes. However, this level of leadership commitment doesn’t benefit an organization unless it is visible and demonstrated to others. When leaders at all levels of an organization share their knowledge of the business strategy with others and actively facilitate and model strategy execution excellence, the likelihood of strategy execution success increases significantly.   

 

Expectations for Accountability

Taking the time to link every key strategic action to a person who has responsibility for getting it done (right and on time), and assigning (often shared) accountabilities for results achievement, is an important part of establishing an organization’s accountability framework. However, simply establishing an accountability framework is not enough. It is also critical for management to establish clear expectations for accountability fulfillment and then reward (or penalize) people based on their commitment to accomplishment and actually fulfilling their accountabilities. In other words, being accountable has to truly mean something in your organization for your accountability structure to deliver any real benefits for your strategy execution efforts. Ensuring employee accountability in this way must be a fundamental role and requirement for every manager/leader in your organization.  

 

Living the Strategy

Once your business strategy has been defined, it’s up to management to see that your organization actually lives it. This includes ensuring that the actions the company takes, its priorities, resourcing, and business decisions are always aligned with the values and business strategy of your organization – even when the pressure is on to do otherwise. While it is absolutely critical that the executives in a company exhibit this behavior consistently, strategy execution success can only be achieved when every person in the organization lives the strategy every day. Business leaders play an important role in cascading this imperative throughout the organization. However, people aren’t perfect and misaligned decisions and actions will happen. When it does, it’s important for managers to recognize, acknowledge, and accept that this has happened and then take positive steps to correct the situation. This is what it takes from a management perspective to truly live your business strategy.     

 

Managing in a New Way    

To achieve strategy execution excellence, leaders must manage in a new way – they must actually lead! Leading includes: establishing the playing field and boundaries for employees (i.e. your organizational value and strategy map); opening up the lines of communication across the company; facilitating, connecting, and integrating people across the organization; and then “getting out of the way” so that people from all over the company can create innovative ways of putting the business strategy into action.

Managing in a new way involves: looking out, looking in, and looking ahead; always asking “Are we doing the right things right?”; and thinking about the impact of today’s actions and business decisions on the future of the business – in other words,  thinking strategically. Managing in a new way means helping employees at all levels of your organization begin thinking in this way and seeing that they have the time to actually spend on this as part of their regular work activities (not as an “add on” to their current job/work). Practically speaking, managing in a new way means asking employees knowledgeable questions, with a focus on strategy, in group forums and one on one situations about the fundamentals of their proposed strategy execution action plans, testing their validity, probing on action plan progress, and facilitating cross-organizational dialogue. 

 

A lot of the discussion I see revolves around the “hardware” required for strategy execution excellence: content and infrastructure. Unfortunately, many organizations limit their strategy execution improvement efforts to these two elements because they are tangible and I think easier (i.e. less emotional) to address. However, experience shows that stopping here is not enough - investments in just the hardware side of the strategy execution excellence equation often deliver sub-optimal results. Not dealing with what is often perceived as the “soft” component of strategy execution excellence – management capability – severely limits the success and impact of your organization’s strategy execution improvement activities.

Smart (and successful!) organizations know that they must take a pro-active approach to ensuring that developing the required management capability fundamentals is a key part of their strategy execution management and improvement plans.

9 Ideas You Can Implement TODAY to Make Your Organization’s Business Strategy “the Way You Work”

One of the primary goals of the strategy management effort in any company should be to create a strategy-focused organization – one where ensuring that everything in the organization (i.e. financial and non-financial resources, projects, work activities, human capital plans, etc.) is aligned with (and delivers on) the business strategy on an ongoing basis is, in a word, an obsession.

Is this the vision for your company’s strategy management efforts?

When you hear this, you might be worried that the emphasis in these organizations is more on the mechanics of achieving alignment with strategy than on the actual business strategy itself. While this is certainly a risk, the key to keeping the focus on the right thing (your dynamic business strategy and results achievement) is to make your strategy the way your organization works. When companies successfully make their strategy “the way they work”, organizational alignment seems to happen effortlessly. However, the truth is that mechanisms for organizational alignment have been created by these companies so that their business strategy framework and business strategy itself have been embedded into as many regular business processes as possible. This is the way that successful organizations make it easy to put their business strategy front and centre every day.

How can your company make your business strategy “the way you work”?

Here are nine things (in no particular order) I implemented when I was quarterbacking my employer’s strategy management efforts to do just that (p.s. the majority of my clients have also successfully implemented some or all of these nine ideas in their organizations so don’t just take my word that they work!).   

1. Make your strategy map into a huge poster and make it visible to everyone

Your strategy map is a very important strategy communication tool so don’t keep it hidden away from your employees! Almost everyone I know blows their strategy map up into a poster and then posts copies everywhere throughout their organization. I haven’t met an employee yet who hasn’t said that their company’s strategy map helped them FINALLY understand what their organization’s business strategy really was – you simply must leverage this powerful outcome! Making your strategy map visible every day to your employees puts your business strategy at the top of everyone’s minds. This opens the door for more consideration of, and discussion about, the value and validity of your company’s strategy throughout your organization.  

2. Ask every employee whether they can see what they do in the strategy map

If your strategy map is doing a good job of telling your strategy story, every one of your employees should be able to “see” their work in your strategy map. Asking each employee this question and then giving them the opportunity to discover and clearly see their role in the successful achievement of your organization’s mission and vision goes a long way towards bringing your business strategy down to the grassroots level where implementation action happens. Engagement with, and ownership of, your business strategy goes up when employees feel connected to it. Take the conversation the next step and help your employees see: (1) that their contribution to strategy achievement goes beyond the strictly functional; and (2) the inter-relationships and organizational integration required to produce the desired business performance results – doing this will increase employee understanding of how your company can achieve business success and the comprehensive role they can play in that success every day.    

3. Stop centralizing the control of your balanced scorecard results review meetings

Who runs your balanced scorecard meetings? If you are like most organizations, your BSC project manager, OSM (Office of Strategy Management) leader/personnel, or Chief Executive does. Why not try this instead – let strategic objective owners or business unit/department owners drive every BSC meeting. Give them basic guidelines on what to discuss (e.g. root cause analysis and suggested corrective action plans for underperforming indicators they are responsible for monitoring) and for how long but let them organize themselves and their team and run their section of each BSC meeting themselves. Nothing builds greater organizational engagement with, and ownership for, your business strategy than demonstrating your confidence in your employees’ ability to successfully execute their strategy management accountabilities in a way that they choose! Also, insisting that owners take responsibility for knowing how their part of the business strategy is working gives them a really good reason to be thinking about your business strategy on a regular basis.     

4. Open your balanced scorecard results review meetings to all employees (and help them get there)

Many organizations limit balanced scorecard meeting attendance to their executive team only. However, running open BSC meetings (where all employees can attend) signals that everyone in your company has a role to play in the successful execution of your business strategy. Open BSC meetings give you an invaluable forum for information exchange, knowledge sharing, and integrated business solution and idea generation. Plus, open meetings help everyone in your organization make time for business strategy as part of their regular job/work activities but only if you actually give employees a way to get to these meetings. This is particularly challenging but important in the case of frontline workers. I have seen lots of creative solutions implemented to get past these hurdles like taking meetings and discussions about BSC results to employees/the shop floor. What creative solutions could you employ to make your BSC meetings accessible to everyone in your company?        

5. Align your employee performance management/appraisal framework and process with your business strategy

Your performance management process is perhaps THE strategy alignment opportunity that has the most meaning to your employees. Since your employees give lots of attention to their personal goal plan, why not add elements of your business strategy to its format (e.g. balanced scorecard perspectives and strategic objectives)? Some of the best solutions I have seen show an employee how their personal goals directly support the achievement of specific strategic objectives. In addition, regular performance management conversations between employees and their manager offer an opportunity to make the discussion of strategy, its relevance to every day work, and the sharing of ideas for strategy improvement a regular work activity for every employee. The result of discussions like these is increased understanding of, and commitment to, the business strategy and high quality, two-way, strategy-focused information and knowledge exchange throughout your organization.         

6. Formalize and recognize strategy management accountabilities

Strategy execution excellence can only be achieved through a network of owners (i.e. strategic objective owners, indicator data and commentary owners, process and project owners, etc.) – they all play a critical role in the success of your strategy management efforts. The first step is to assign these ownership roles throughout your organization but you must take it a step further. You’ve got to formalize these responsibilities by including them in job descriptions and employee goal plans and then including an assessment of the completion of these ownership roles as part of the annual review process. Doing this signals the importance of taking ownership of, and accountability for, your business strategy and securely places it into one of the core management structures in your organization.  

7. Reward and recognize employees for taking action that supports your business strategy

Most organizations have a reward and recognition program in place. These programs play a critical role in re-inforcing desired behavior so why not align your reward criteria with your business strategy? In the best cases I have seen, core values and strategic objectives become the criteria and doing something that supports or impacts these elements of the business strategy is rewarded and recognized via a simple program. When you recognize and share the story of what an employee did, you start breaking down barriers (i.e. what can I do to impact the business strategy from here?) and provide employees with models of putting your strategy in action that they can emulate. The moment that your employees start rewarding and recognizing each other for strategy-supporting actions and behaviors, you will know that you have really made your strategy “the way you work”.  

8. Build your business strategy into your decision making processes

All companies have formal and/or informal decision making processes with some sort of associated criteria for making business decisions. What criteria does your organization use? You might include a risk assessment and/or an evaluation of return on investment. Does alignment with business strategy come into the picture? Organizations that are striving to live their business strategy will include (1) an assessment of alignment with strategic objectives, and (2) an assessment of strategic value as key components of their business decision making criteria. In fact, many will place a relatively high weighting on these two factors alone. Including strategy-based criteria in your business decision making process profoundly changes the way your employees begin to think about what they do because it brings your strategy into every option discussion and decision made throughout your company.   

9. “Talk” about your strategy all the time - forever

In the worst case scenarios, an organization’s strategic plan sits on a shelf gathering dust. To actually achieve strategy execution excellence, your business strategy must be front and centre to the workings of your organization. One of the best ways to do that is to have a solid strategy communication plan, with varying messages and using multiple communication modes, that you implement on an ongoing basis as the way you do business. It is important to realize, however, that what you talk about when I say “strategy” changes over time. The best organizations I have seen start off with the executive leader sharing the business strategy with the organization and then they gradually transition to sharing “homegrown” stories about the strategy in action. Success is achieved when employees put their own spin on your strategy and what it looks like in action, volunteer to share their own strategy in action stories with their peers, and begin discussing their ideas for strategic improvement freely. This is truly an example of making your strategy the way you work.      

 

Making your business strategy the way your organization works doesn’t happen overnight – a good reason to start now! Looking for ways to build your business strategy and business strategy framework into your company sooner than later can help your organization realize the return on its investment in strategy management principles and practices earlier than expected.

Be Here Next Year: The 4 Point Plan for Your Business to Survive (and maybe even thrive!) in a Tough Economy

Bankruptcy and slow business growth continue to plague businesses of all sizes across North America and around the world. For example, while the number of business bankruptcy filings in the USA has remained relatively steady through 2010 when compared to 2009 numbers (58,322 for 2010 to September 30^th versus 58,721 for the same period in 2009), the 2010 results at September 30^th show a 151% increase over 2008 filing results (38, 651) and a 225% increase over 2007 filing results (25,925) for the same period (January 1^st – September 30^th) (data source: http://www.bankruptcyaction.com/USbankstats.htm).

When I talk to business leaders about their goals for their company for the upcoming year, many respond simply by saying “to still be here next year”. It may sound as though these executives are setting the bar a bit low but in a sagging economy, and in really tough industries like manufacturing, just making it successfully through another year can feel like a stretch goal. For these organizations, surviving to do business another day/month/year represents a huge victory for their leaders, their employees, their customers, and their business partners.

Is your company in the “be here next year” goal club?

If it is, here’s your dilemma: you need to do something different to achieve this goal but you don’t have the time and extra resources to embark on a complicated turnaround plan. For you, the themes for your business survival are going to be focus, effective action, efficient operations, and priority-based decision making. Bottom line? You don’t have the time or the resources to waste your organization’s effort on things that aren’t critical to producing results. What you need is a streamlined game plan that will position your company to, at minimum, still be here next year, and, at best, grow over the longer term.

Here’s the streamlined game plan you need: a four point plan, supported by five “must have” organizational capabilities, you can implement in your company to survive (and maybe even thrive) in the current economy.

 
The “Must Have” Organizational Capabilities

 Here are the five organizational capabilities, or core principles, your company must adopt today to survive and thrive moving forward. These are described here in “behavioural” terms (i.e. what they look like in action) so that (1) you and your employees have a better chance of actually implementing them; and (2) you can assess through observation whether people in your organization are putting these required capabilities into action because the successful implementation of these core principles requires every one in your organization to live them every day.   

Focus: Everyone across our organization has a laser focus, bordering on obsession, on what is most critical to the success of our business. This means that we are always asking such questions as: “Is this the right thing to do (and how can we do it right - i.e. effectively, efficiently, and with excellence)?”, “Will this help us get to where we need to go?”, and “How does this decision fit with our business priorities?” Such a pervasive drive to do what will produce the business results we desire over both the short and long term is critical to our organization’s success.  

Leadership: Our executives, managers, and supervisors are committed to hands on leadership. This means actively facilitating and modeling all of the organizational capabilities we are committed to adopting AND taking highly visible steps to ensure that our company implements all of the elements of the four point plan. Asking knowledgeable questions in group forums and one on one situations about the fundamentals of proposed action plans, testing their validity, probing on action plan progress, and facilitating cross-organizational dialogue are examples of the critical actions our leaders take to be dynamically involved in ensuring the success of our organization.

Engagement: We know that the success of our company relies on the participation of our people. To be successful, every one of us is involved and invested in producing great business results. One way our employees do this is by actively participating in creating our business strategy. Because of this they understand it and can see how their work links with, and contributes to, business results achievement. Everyone takes part in meaningful, two-way dialogue on our strategy, and business priorities, and what it takes to implement it. By encouraging and helping everyone to participate in the process of strategic improvement, and by supporting healthy cross-functional discussion and collaboration, we continuously build a commitment to focused business results achievement that extends right down to the front lines of our organization.

Action: We are committed to taking intelligent and disciplined but imperfect action in business situations. While we always think before we act, we don’t get caught up in “analysis paralysis”. We know that it is better to take action, implement a solution that is 80% right, and then improve it as we go than it is to wait to implement a perfect solution. We have a bias for putting our business priorities into action because we know that, at the end of the day, actually DOING what we think is right for the short and long term success of our company is the only chance we have of actually achieving our desired business results.   

Accountability: Everyone in our organization is dedicated to taking action, following through, and building a record of accomplishment. This level of commitment is actively supported, valued, recognized, and rewarded by our business leaders on an ongoing basis. All of us are able to live this culture of accountability because we take the time to work together to link every action to a person who has responsibility for getting it done (right and on time), and we accept shared responsibility for results achievement.

 

The Four Point Plan

The essential and differentiating feature of this plan is its almost ruthless dedication to focus: a focus on the most critical elements of your business that will deliver the success you want and, once that is defined, an unrelenting focus throughout your organization on keeping all eyes on the ball and taking the most effective path to excellence and results achievement. Follow this plan and execute it in a never-ending cycle to keep your business viable over both the short and long term.   

 

1. Focus Position and Direction

 The goal of the first point in the plan is to leverage a clear understanding of your organization’s operating environment and define a razor sharp value proposition that will allow you to satisfy your customers/stakeholders and win markets.

To understand your operating environment, it is critical that you scan your roster of customers/stakeholders and create a focused list. If individual stakeholders have similar needs and expectations (which you will document and list in order from most important need/expectation on down for each stakeholder), it is often more convenient from a stakeholder management approach to think about some of these individual stakeholders as a group. Once your list has been assembled, it is important to prioritize it – that is, place your stakeholders in rank order from 1 (most important). While you will never share this information with your stakeholders, ranking stakeholders/customers provides your organization and people with an important tool for more focused decision-making moving forward.

You must also scan your market space and review the performance of others who play there to fully re-assess and understand the potential in the market. A variety of decisions will arise through this review including what market space you should/want to play in. The goal here is to be focused in identifying that market space and then defining very clearly what it takes to capture/maintain/grow your share of it.

Finally, once your target market has been established, it is essential to crystallize the value proposition your organization must adopt and deliver to achieve your market share goals. Whether you are re-focusing your value proposition or re-defining it, it is important to leverage the information learned about your stakeholders/customers, as well as performance requirements, when designing the focused value proposition required to achieve your desired business results.     

 

2. Map Priorities

The goal of the next point in this plan is to define, in language that everyone in your organization can relate to, the value chain your organization must implement to deliver your value proposition and the components of that value chain, or relative business priorities, all parts of your organization must focus on over a defined period of time. The best approach to defining this value chain is to create a strategy map for your organization. As well as providing a visual picture of your value creation strategy (in the form of strategic objectives), the strategy map translates your strategy into clearly defined terms so that front line employees can see themselves, and their work, in it. Developing a consistent understanding of what your strategy looks like in action translates into a higher probability of business results achievement.

A weighted strategy map allows your organization to communicate the relative priority of the various strategic objectives on your strategy map. When done right, this weighting focuses the decision-making of all employees on a daily basis and helps them determine where to best target/invest the often limited resources available to them.

By helping everyone in your organization see where they fit into your value creation plan/strategy and your business priorities, you are in a better position to engage them in discovering how they can contribute to, and actually achieve, business performance success.   

 

3. Resource & Work the Plan

Once your business strategy has been focused, the goal of this point in the plan is to focus the operational activities and actions of your organization to produce your desired business results in a way that is takes the most effective and efficient path to business performance excellence.

A critical success factor for the execution of your company’s value creating strategy is maximizing organizational alignment. Organizational alignment reduces the drag in your business operations, improving efficiency and effectiveness. One important way of doing this is to inventory your core business projects and current strategic projects and line them up with your value creating strategic objectives and key business priorities. This allows you to identify critical business performance gaps, eliminate non-contributing business activities, and free up resources for re-deployment to more business critical activities. This is an important step in effectively resourcing your business plan without adding significant additional costs. The fact is that identifying the financial and non-financial resources that are absolutely necessary for business plan implementation success is a critical step in the strategy execution process. If these resources are missing and/or are not aligned with your business priorities, you must put them in place in the most cost-effective way possible. The absolute truth is that you cannot successfully achieve your desired business results without targeted resource support.

Another critical step in ensuring successful operational execution of your business strategy involves cascading your business priorities appropriately into every employee’s work plans. Doing this will ensure that there is no doubt across the organization as to where to focus day to day work efforts. Finally, you must be sure to support successful implementation and strategy execution with: clear accountabilities at all levels of your organization for action completion and results achievement; an attention to performance feedback that helps keep employees focused on replicating activities that produce the desired business results; and good two-way communications to channel ideas that strategic and operational improvement up, down, and across your organization.   

4. Make SMART Decisions

The goal here is simply to make intelligent business decisions that will directly impact and enhance the focus in, and of, your business strategy, action plans, and operations.

Face it – business is all about making decisions. Both day to day operational decisions and the big directional decisions contribute to the overall success of your organization. To help ensure that the decisions made in your company stay focused on moving you towards the business outcomes you require as effortlessly as possible, it is important to provide your people with information (i.e. data and results analysis/commentary) that tells them whether the business is moving forward. The best tool for this is still the balanced scorecard. When coupled with a dashboard of the operational measures that drive the performance of strategic indicators, the balanced scorecard helps your people learn about what is and isn’t working in your business, identify and focus on the critical strategic issues, and fix the root cause problems that are hindering positive progress on your business priorities.

When it finally comes to making decisions in your business, taking a consistent approach across your entire organization will help ensure that the actions taken as a result of these decisions remain focused on moving your organization forward according to business priorities and desired business performance outcomes. This consistent approach can be achieved by implementing a new filter or criteria into the conversation and decision-making process. Implementing the SMART criteria detailed below provides your company with the effective filter you need to ensure that all of your employees are taking a consistent approach and making business decisions that you know will support the direction and priorities of your business:          

S = strategy-focused: use alignment with key business/strategic priorities as the first criteria when weighing options and making decisions – the more aligned an option is with business priorities, the better it is  

M = manage the risk: managing and/or mitigating risks are important for business success so make business decisions with risk in mind – make choices that allow you to manage (or eliminate) associated risks most effectively

A = actionable: defer to options that your organization can put into action with the capabilities and resources it has today – while this can limit your options at times, taking this approach to option evaluation facilitates execution and minimizes associated costs

R = return on investment (ROI): the speed and value of the return, if any, to be gained through the implementation of certain options should play into the decision-making process – the quicker a high return is realized, the better it can be for your business

T = timely: related to the “actionability” of an option, it is important to consider how quickly your organization can implement options under consideration – the sooner options or solutions can be implemented, the sooner your organization will reap the benefits  

Most organizations will use all of these criteria in a structured way to evaluate and assess choices and guide option selection. The way your organization chooses to apply the criteria will be specific to your business needs, however, the key to success is to apply them consistent across your business in decision-making situations.

 

So, this is your four point plan. As you can see, the plan is a cyclical system that must be implemented on a never-ending basis. Your organization must work the system by: constantly revisiting each point in the plan; checking validity, current assumptions, and learning; assessing progress; and looking for (and implementing) opportunities for improvement. Cycling through the plan in this way is a critical success factor for the survival of your business.        

There is no doubt that there are many more actions you can take and management principles you can implement to ensure that your company will survive and thrive into the future. However, based on my experience working with many organizations in turnaround situations, this is the focused plan/approach required to turn the tide, make it successfully through the short term, and begin building the capacity and organizational capability required for longer term viability.

If you are concerned about whether your company will still be here next year, I encourage you to begin implementing this proven system for success today.

Leading for Strategy Success (a message for all employees)

Who provides strategic leadership in successful organizations? If you think this kind of leadership is just for executives, VP’s, and Senior Managers, then I want to challenge you to think again. I particularly want to challenge ALL employees, particularly those on the frontline, in every business, to see him or herself as a strategy leader.

 

The truth is that everyone can be a strategy leader whether they are in a formal leadership role or not. Did you know that long-term business success can only happen when everyone takes the initiative to work together to create, implement, and improve their company’s business strategy? At its core, this is what being a strategy leader is all about.

 

The fact is that it would take a very long time for companies to move forward, grow, and be successful if they waited for the business executives alone to come up with all the great ideas relating to strategic direction and strategy. It is impossible for this small group of employees to have the comprehensive and detailed view of the business and the insights required to achieve quantum leaps forward in business.

 

When you think about it you realize that it’s almost crazy to think that a handful of people could have all the knowledge needed to achieve this result! However, this is how most businesses operate today. They put pressure on their executives to have all the strategic insights required to produce exceptional business results.   

 

But what if businesses tapped into the knowledge, wisdom, and insights of everyone involved in, and with, their organization to build, manage, and improve strategy?

 

Imagine what strategic insights could be gathered from such a large group of people with their deep knowledge of their part of the business and where the opportunities are! And imagine if this large group of people contributed these insights on an ongoing basis throughout the strategy creation, management, and improvement process. Can you imagine how powerful and successful such an organization would be, regardless of what their definition of success looked like? (e.g. educating girls and women in Afghanistan, eliminating poverty in your community, growing market share and profits, etc)

 

Well, this is exactly what happens when everyone in an organization is a strategy leader.

 

Here’s what you can do today to be a strategy leader in your company:

 

1. Really Understand the Business Strategy

Get to know the strategy, including the core values, strategic objectives, business priorities, and strategic action plans, and practice telling others the strategy story using your company’s strategy map.

 

2. “See” Your Work in the Strategic Plan

Make sure that you can clearly see how you contribute every day to successful strategy execution. Think beyond the obvious functional connections – you contribute in more ways than you might first imagine!

  

3. Put the Strategic Objectives to Work Every Day

Successful strategy execution happens day after day so bring the strategic objectives you play a role in to work with you every day. It is important that you consciously put them into action in as many work situations as possible.

 

4. Work with Others to Make the Business Strategy Even Better

Because you are putting the business strategy into action every day, no one knows better than you, and your co-workers, where the opportunities for improvement are. Take action and make required improvements, or feed your ideas back into the strategy improvement process.

 

5. Practice Thinking Strategically

Look at issues and new opportunities from a strategic perspective and always ask: “Is this the right thing to do in light of our strategy?” When the answer is “yes”, embrace changes that will help move the business strategy forward.

 

6. Ask Lots of Questions – About Everything!

Ask probing and insightful questions when presented with issues and opportunities. Use the answers to these questions to assess potential and analyze the value of an idea or action in relation to the strategy and to improve the strategy itself.

 

7. Leverage Strategic Information to Make Good Decisions

Access strategic information, like balanced scorecard results, to understand what is going on inside and outside your company. Use this information to make strategic decisions, establish priorities for your team’s work, and set targeted goals.

 

8. Focus on Building Alignment with Business Strategy

Organizational alignment and synergy are critical for strategy achievement. This means that you must contribute to ensuring that all work is lined up with the business strategy. Do what you can to make this alignment and synergy happen and be sure to speak out when you see things falling short.

 

Of course, the executive team MUST help all employees be strategy leaders by actively offering encouragement and support. The old style of leadership and management control will not allow your organization to realize the full benefits of this new approach. A new style of leadership is required to successfully engage and mobilize strategy leaders at all levels of an organization.

 

It’s worth the effort to change.

 

When everyone in an organization works together to put these eight actions into practice, the company will be better positioned to successfully formulate and execute its business strategy, and achieve the exceptional business performance results everyone in your company is striving for.

 

And besides – it’s more fun to work in an organization where you play a vital and active role in its success!

Strategy Execution Challenges? Build a Culture of Accountability

May 6, 2010

Accountability.... It’s an important word and a critically important (business) fundamental that, whether you realize it or not, is getting a lot of air time right now. Unfortunately, it seems to be for all the wrong reasons - mostly as a result of a LACK of accountability. Here are just a few examples from my perspective:

The recent/ongoing economic downturn? A lack of accountability within the financial system for the quality and sustainability of their lending products and a lack of accountability at the CEO level for ensuring the long term profitability (and, in the case of the failed institutions - viability) of their companies.

The Toyota car debacle? A lack of accountability by the leaders of that organization to uphold their own quality standards and take timely corrective action steps to protect the safety of their customers – even if it meant telling the truth and risking their reputation in the eyes of the public.

One bright spot on the accountability front is (surprisingly) the efforts currently underway in the Gulf of Mexico by BP to try to fix the environmental disaster they have created. Now, don’t get me wrong. I am not a fan of big oil but, by taking accountability for the mess they have made, BP appears to be trying to aggressively solve the problem by implementing a creative solution that could help mitigate the depth of this tragedy.

Strangely enough, this last example gives us some insight into the powerful role of taking accountability (and action) on achieving business goals and objectives. In fact, building a culture of accountability is one of the building blocks of strategy execution success.

Let’s start by talking about what culture is. The dictionary definition for organizational culture goes something like this:   An organization’s culture is a product of its behaviors, beliefs, and values and it is built into all supporting organizational processes and structure. As you can see, culture is foundational to any organization, including its functioning, primarily because it manifests itself through behaviors and actions. In addition, culture is woven into the fabric of the organization, making it pervasive throughout it.

Essentially, an organization’s culture is big, is everywhere, and is critically important.

There's no getting around it - culture is a powerful force within an organization. An organization’s culture can work positively or negatively for it. If you want your organization to BE a certain way, the best thing to do is to build that "way" into your organization’s culture.

Organizations that excel at strategy execution display a dedication to action and follow through and they build this "way of being" right into their culture. In fact, they go so far as to define, value, support, and reward this commitment to accomplishment as part of their regular way of doing things. That is, they build both the expectation of, and supporting infrastructures for, accountability at all levels of their organization right into the company. When these elements are integrated together just like this, they form the foundation of a culture of accountability.

For a culture of accountability to have an real impact on the business through strategy execution, the organization must actually LIVE this culture of accountability. This includes taking the time to link every action to a person who has responsibility for getting it done (right and on time) and has the resources, capabilities, and supports available to deliver on this responsibility. It also means assigning shared accountability to all members of the organization (from the front line to the C-suite) for ensuring that these actions and the right work get done, and that desired results are achieved. Shared accountability plays a critical role in strategy execution success because everyone has a role to play in seeing actions through, regardless of whether they have lead responsibilities or not. 

Poor strategy execution is rampant in businesses today and it comes with huge financial and non-financial costs. The ultimate result is the failure to achieve key organizational performance goals. While building a culture of accountability is one of the keys to strategy execution excellence, no one is going to tell you that it is easy - it takes time and a great deal of effort to change an organization’s culture. However, with effort, dedication and discipline, your organization can make the required changes.

Want your organization to be a strategy execution success story? Begin building a culture of accountability TODAY!   What will your first step be?