If you'd like to explore the collaborative strategy approach in more detail, go to http://www.collaborativestrategy.ca/download-now/ and download my new ebook "Business Results Revolution for Healthcare Organizations" now.
If you'd like to explore the collaborative strategy approach in more detail, go to http://www.collaborativestrategy.ca/download-now/ and download my new ebook "Business Results Revolution for Healthcare Organizations" now.
More often than not, when I ask the leaders of public sector healthcare and social service organizations this question, they can’t give me a straight answer. Sometimes, I get a blank stare or (frequently) they object to my question.
What do I mean, what stakeholder outcomes are we accountable for delivering? Outcomes are difficult to track back to one source (they often say) - we can’t possibly be held accountable for producing outcomes.
However, it IS possible and, in my opinion, exactly what we should expect from all public (and non-profit) sector organizations. Being able to clearly state (and put your organization’s reputation on the line for) what results you will deliver or enable, and the real difference your organization will make in the world, is the necessary first step on the path to being able to demonstrate your organization’s true value.
If being able to demonstrate value isn’t an imperative for your organization right now, I predict that will become critically important in the very near future.
More and more frequently, funders (i.e. governments, taxpayers, donors, etc.) are demanding assurance that the money they have entrusted to the organizations they are investing in is (1) being used wisely (i.e. it is being used for what it was meant to be used for), and (2) that it is actually making a difference/having an impact (i.e. their financial support is translating into tangible results and outcomes). As funders become more discerning, the organizations that have publically declared and committed themselves to delivering clearly defined stakeholder outcomes, AND can demonstrate that they are successfully producing those results and outcomes, will find that they enjoy sustainable funding support.
Making a clear statement about the ultimate outcome(s) your organization is willing to take accountability for doesn’t have to be a daunting proposition - it’s really just a logical extension of your organization’s mission statement and stakeholder promise or value proposition. Let’s take a closer look.
Remember that your mission statement is simply your purpose – a statement of why your organization is here, the impact you wish to have on whom, and/or the difference you want to make for society/the world. Your stakeholder value proposition is the unique set of benefits that are valued by your primary stakeholder and that you are promising to deliver.
Both of these statements usually hint at the value your organization delivers, however, they may or may not spell out the results or outcomes you plan to deliver and be held accountable for. So, leveraging both your mission and stakeholder value proposition statements, it’s important that you take the next step and clearly state what these results and/or ultimate outcome(s) will be.
When I am working with an organization to create their strategy map, the pinnacle strategic objective, at the very top of the strategy map, is usually where we place this ultimate outcome objective/statement. For public and non-profit sector organizations it’s usually at the top of the stakeholder/stakeholder outcomes perspective on their strategy map.
To determine your ultimate stakeholder outcome objective, you and your team need to ask and answer a few important questions:
1 What ultimate outcome are our stakeholders (all stakeholders – not just your primary stakeholder or your funder) united behind/do they all wish to see produced?
2 What is our contribution to the achievement of this ultimate outcome?
3 What could we reasonably be held accountable for delivering or producing, given our sphere of influence, that aligns with, directly supports, or actually is this ultimate outcome?
4 If we committed to delivering this outcome, would it have a critically important impact on society/the world, our service recipients, our other stakeholders, and/or the systems we work in?
Key inputs into the discussions prompted by these questions include your insights about your stakeholders’ needs and expectations, your analysis of the external environment and systems you are operating in, and, as mentioned previously, your mission statement and stakeholder value proposition.
At the end of a thoughtful and engaging set of discussions, you should be able to come up with a clearly stated outcome/set of outcomes that you are prepared to be accountable for delivering or enabling, that you are confident you can influence (i.e. it’s reasonable), and that you know is meaningful to the people you serve and your stakeholders.
While having a clearly stated ultimate outcome is a key step in demonstrating your organization’s value in a way that satisfies your funders and other stakeholders, this isn’t the only reason why you should take the time and effort to define it.
Once you know what ultimate outcome(s) your organization is driving to produce, you can:
● Orient the rest of your business strategy, strategic objectives, and dependencies (i.e. your strategy map) around supporting this outcome,
● Design your business model, organization, and operations around this strategy so that you actually produce the necessary results and desired stakeholder outcome(s),
● Translate your strategy map into a Balanced Scorecard and measure, monitor, and improve your organization’s performance in producing your ultimate outcome(s), and
● Engage, motivate, and align your employees behind your desired outcome(s).
The bottom line is that getting clear about your ultimate stakeholder outcome drives organizational alignment with, and focus on, achieving this key strategic objective.
So, whether your organization’s top stakeholder objective is Advancing Healthcare for Your Community, Shaping the Innovations and Great Companies of the Future, Continuously Improving Population Health, or Enabling Citizen Self-Sufficiency and Social Inclusion, boldly and clearly stating which ultimate stakeholder outcome(s) your organization is accountable for delivering or enabling is the first step to actually making the real, high value difference I know you are striving to make - in the world, on society, and for the people you work with and serve.
Tags: four questions to help you determine your organization's ultimate stakeholder outcome objective, the path to demonstrating your organization's true value, ultimate stakeholder outcome
Selecting exceptional balanced scorecard indicators is part art and part science. The key to success in both is to start with a good definition of the strategic objective you are trying to measure.
A good strategic objective definition describes what the strategic objective looks like in action including what is and isn’t included. It also outlines why the strategic objective is important including the value it contributes to your organization and delivers to your stakeholders, and how it enables the achievement of desired business and customer or stakeholder outcomes, your mission, and your vision.
In addition, clear strategic objective definitions provide a critical guide for your employees as they focus on executing your strategy, and, important for this discussion, they provide a touchstone for determining your balanced scorecard indicators.
With this in mind, let’s first discuss the science side of balanced scorecard indicator selection.
As it is in most things in business, a well thought out set of criteria is the foundation for producing good results – the same applies when selecting BSC indicators. I like to use SMART criteria as the technical basis for selecting indicators but I define the elements of SMART differently than you typically would for personal goal setting. When it comes to SMART and BSC indicators:
S stands for specific and simple: First of all, the indicators you select for any given strategic objective should relate closely to/be representative of the strategic objective based on its definition. This helps ensure that the indicators you use are relevant and effective for strategy management. Simple indicators are easy to calculate, understand, and analyze. Because most people find it hard to respond to indicators with multiple components and complex calculations when results are performing below expectations, simple is always the best route.
M stands for measureable. Most organizations measure lots of things so it is rare that you need to invest in creating new indicators. Look at what you are already measuring today and consider elevating the good candidates to indicator status. Another option is to take two measures that you currently use and combine them in a different way to create a completely new indicator for your balanced scorecard.
A stands for available. A strong candidate indicator provides results within 3 – 5 days after the close of your measurement period. Having to wait weeks for results means that you will be managing your strategy with old information and, in these days of rapid change, stale results do you no favors.
R stands for reliable. When you are measuring the vital signs of your company, you want to use indicators that will pick up changes as soon as they happen. While you may choose not to respond to a change immediately, good indicators let you know that a change has in fact occurred, giving you the option to respond based on your assessment of the nature of the change.
T stands for timely. Good indicators give you information to look at on a regular basis – usually monthly or quarterly. The ideal measurement/reporting frequency will depend on what you are measuring, why you are measuring it, and the amount of time required to see the impact of corrective action on results. The goal is to select a measurement frequency that maximizes your ability to manage your strategy effectively.
Many organizations add additional criteria to their list (e.g. validity, data quality, etc.). While the list above is a solid set of criteria, there is nothing to stop your organization from adding more items to your list.
I generally suggest that you apply these technical criteria (the "science") first to assemble your list of 1 or 2 candidate indicators for each strategic objective on your strategy map.
The next step is the art part of selecting your balanced scorecard indicators. The real art comes in answering three questions that form the critical test you must apply to determine whether a candidate indicator should “make the cut” onto your balanced scorecard.
The first question to ask is: “What behavior will this indicator drive?” Recall that each strategic objective definition outlines what the strategic objective looks like in action. Putting a strategic objective into action requires specific organizational behaviors. By selecting indicators that drive the behaviors necessary to execute the strategic objective as it's defined AND provide insight into strategic objective health, you will ensure that your strategy is moving forward in the right direction. Sometimes you will be surprised by the behavior an indicator produces! So, when considering a candidate indicator, think through what employee, customer, and/or stakeholder behavior this measurement might drive and consider whether that behavior will move the strategic objective forward in the desired way. If the answers to these questions aren’t as positive as you would like, I would recommend looking for another indicator.
Next, ask “What conversations will this indicator enable?” The key to effective strategy management is organizational conversations - your balanced scorecard results, including the data and commentary provided for each indicator, should set the scene for meaningful conversations about the health and progress of your strategic objectives and, ultimately, your entire strategy. A strong indicator helps people across your organization have solid discussions about what is and isn’t working in your organization, the inter-relationships and impacts across your organization and within your value chain, and whether your business strategy is doing what you expect and need it to do. Be sure to select indicators that will elevate the quality of the strategy conversations at all levels of your organization.
Finally, be sure to ask “Will this indicator drive action if required?” Strategy, and its execution, is usually achieved through organizational change. Because achieving your mission is a never ending goal, you will always be striving to do something more/different/better to get where you ultimately want to go. Your balanced scorecard is a key feedback mechanism that tells you how well you are progressing and sometimes things don’t progress as planned. When this happens, indicator performance results will give you an early warning sign. Now, we all know that indicators are not diagnostic – you need to do more investigation to identify and understand the root cause problem. The key to turning indicator and strategy underperformance around is resolving root cause issues. A high value indicator will enable you to do your root cause detective work effectively and then take appropriate action to eliminate critical issues that are negatively impacting the health of the strategic objective. Indicators that do not help you take action that produces meaningful organizational change should be left off of your balanced scorecard.
Crafting a robust balanced scorecard is BOTH an art and a science. The science part relies on a solid set of selection criteria which helps ensure that you identify quality candidate indicators. Applying the art side of the indicator selection process by asking the three critical questions outlined above ensures that only high value indicators appear on your final balanced scorecard.
Remember: While a quality indicator set is a good goal to have for your balanced scorecard, resist the temptation to stop there because a high value indicator set is the real key to making sure that your balanced scorecard is the powerful strategy management tool it can, and should, be for your organization.
Tags: balanced scorecard, balanced scorecard indicators, how to make your balanced scorecard a powerful strategy management tool, how to select high value balanced scorecard indicators, SMART criteria, strategic objective definition, the art and science of selecting balanced scorecard indicators, what behavior will this indicator drive?, what conversations will this indicator enable, will this indicator drive action if required
An important step in defining your organization’s strategy is identifying all of your stakeholders. A stakeholder, in my mind, is anyone who can have a positive or negative impact on your organization’s ability to achieve its mission and vision. Stakeholders are important to organizations because they are usually the individuals or groups that the organization is ultimately accountable to.
So who counts as a stakeholder? Customers are a special group of stakeholders that get identified because of their role in the revenue generation value chain. Employees are another important stakeholder. In private sector organizations, the shareholder is considered a key stakeholder (particularly in the current age of activist shareholders). In public sector organizations, the funder(s) (i.e. the government/taxpayers, donors, etc.) are another class of stakeholder.
The key is to look both inside and outside your organization to create a list of individuals and/or groups that can help or hurt you in your drive to achieve your mission and vision.
Most organizations have a very long list of stakeholders and this long list can make responding to stakeholder needs very challenging indeed. One way to make a long list of stakeholders more manageable is to look for opportunities to group stakeholders with common needs and expectations together. Sometimes you might be surprised by which stakeholders can be grouped together based on this common ground.
That being said, not all lists of common needs and expectations are created equal. While stakeholder groups may have things in common, they may prioritize them differently. For example, employees and volunteers may both want a fulfilling learning experience but this need may be higher up on one group’s “must have” list than it is on the other’s list. When this is the case, it might be best to not lump stakeholders with common needs and expectations together. The key is to not force it. If it will be risky to lump multiple stakeholders/stakeholder groups together (i.e. thinking of these stakeholders as a homogeneous group will produce faulty business decisions) then don’t feel pressured to do it.
The goal is to get your stakeholder list down to as manageable number as you possibly can (fewer than 8 different stakeholder groups is what I often see).
However, I do want to say one word about the process for developing your stakeholder list. Be sure to assemble a group of employees with your senior leadership team and have them work together to create your stakeholder list. When you take this approach you’ll discover (if you are like most organizations I know) that there is a lack of consensus on who your organization’s stakeholders are. Working together to create a commonly understood and agreed to stakeholder list is the first step in creating a solid foundation for your strategic plan and in building the organizational alignment necessary to produce better, more consistent business decisions.
While getting your stakeholder list together is a great first step, don’t be tempted to stop there. Here’s why.
As I mentioned earlier, most organizations end up with a list of, on average, eight stakeholders. Some have more and some have less. Any way you look at it, trying to meet the needs and expectations of eight different stakeholder groups, that you acknowledge have different motivations and are making different (often competing) demands on your organization, can be an enormous challenge. But many organizations strive (and struggle) to do exactly this every day.
Unfortunately, despite their best intentions and a great deal of honest effort, organizations that try to meet the needs of all their stakeholders equally usually end of serving (and satisfying) none of their stakeholders in a way that delights.This is a problem.
It’s so much of a problem that savvy business leaders and employees will naturally (and often secretly) choose which of their stakeholders is the most important one to respond to. That is, they decide who their number 1 stakeholder/stakeholder group is. Who can blame them? It’s the only way to manage competing demands and to prioritize the work that goes into responding to stakeholder needs and expectations. From there, whether they realize it or not, business leaders will make important business decisions, including ones with real resource and funding implications, based on their idea of who they are there to serve (i.e. their number 1 stakeholder).
While this sounds great, what usually happens in organizations is that there is a lack of consensus on who the number 1 or primary stakeholder is. Imagine the chaos that could exist if, for example, every senior manager at the executive table has a different view of who the organization’s primary stakeholder is and were making big business decisions with their own particular view in mind? Sound unlikely? Think again.
Why not test it out for yourself in your organization? Ask the next three business leaders you meet who your number 1 stakeholder is and see whether their answers are the same (you are way ahead of most organizations if they are).
Once you’ve determined which of your many stakeholders is your primary stakeholder, and everyone in your organization is on the same page in this regard, everything in your organization changes – here’s how:
You can create a stakeholder value proposition/promise that is focused on delivering value to one stakeholder and not many (here’s a secret: if you exceed the expectations of your primary stakeholder, you’ll almost always make many of your other stakeholders very happy).
You can design a balanced business model that strives to meet the needs of multiple stakeholders but keeps these needs appropriately subordinate to those of your primary stakeholder.
Business leaders and employees have the same primary stakeholder in mind as they develop and deliver their work.
Business leaders and employees have a consistent filter/criteria for making prioritization, trade off, and investment (i.e. resourcing, spending, and work effort) decisions.
Your organization works together in a more integrated and efficient way to serve your stakeholders, deliver outcomes, and achieve your mission and vision.
Once again, the best way to determine who your primary stakeholder should be is to engage a cross-functional, cross-level team in a conversation that ends with consensus on who your number 1 stakeholder is. And though you likely won’t go out and tell your stakeholders where they rank on your list (no use in alienating anyone – they are all still important to your business success in the end!), having clarity across your organization is a big win.
It’s important to realize that achieving the benefits I outlined above isn’t as easy as deciding who your primary stakeholder is – there are implications associated with your selection that you need to work through and decide whether you and your organization can really live with the necessary tradeoffs. Only until you are comfortable with the implications of your decision should you declare who your number 1 stakeholder is.
Tags: how to create a stakeholder list, how to identify your stakeholders, number 1 stakeholder, stakeholders, who is a stakeholder, why select your number 1 stakeholder?
Tags: strategy conversations, what difference will strategy conversations make to our business results?, what strategy conversations can do for private sector companies
I was recently asked what the critical factors for successful organizational performance management (OPM) deployment are. Rather than keep these CSF’s to myself, I thought that I’d share them here with you (listed in no particular order):
OPM is recognized as an organizational priority
For many organizations, implementing and adopting OPM represents a significant shift. An organizational change of this magnitude will almost certainly encounter resistance – often displayed as attempts to continue doing things the “old way” rather than placing a priority on new activities and efforts. The only way to make the required organizational transformation is to declare OPM an organizational priority and then follow through with aligned expectations for appropriate actions and behaviors.
Full Executive and Senior Leadership Team commitment
In successful organizations, the chief executive, his/her team, and the senior management group must all be willingly to demonstrate active commitment to the OPM journey and take all steps required to enable its success. What does this “look like”? Walking and talking OPM and modelling requisite behaviors at all times and across the entire organization.
Employee availability, and active participation, in OPM processes
A key to developing organizational buy in for OPM, and producing high quality products and outputs (e.g. a strategy map, balanced scorecard indicators, etc.) during the OPM journey, is involving a broad range of employees (from multiple functions and levels) in a variety of OPM activities. The key to achieving the desired level of employee involvement is helping employees participate in working sessions and “homework” activities – this can only be achieved when managers: (1) communicate the importance and value of active participation in these activities to employees; and (2) take the steps required to release employees from their day to day duties so that they are free to participate in OPM activities.
Make a Commitment to Conversation
When it comes to strategy formulation and OPM, our traditional predisposition is to take a top down approach. That is, strategy is created at the executive level and then rolled down and out to the organization for execution. This approach has failed on so many levels for long enough that you’d think that we’d know better by now. Unfortunately, this isn’t always the case. These days, better business performance results are achieved when strategy formulation and execution/OPM are completed through a process of two-way dialogue that engages your organization and even other stakeholders. Yes – it can be messy and matrix-y, and require multi-tasking but it’s the only approach that enables agility in these constantly evolving, dynamic times. As a result, organizations that are committed to achieving success through OPM must also be committed to an ongoing process of dialogue and two-way exchange.
Ensure appropriate infrastructure deployment
Successful OPM deployment requires defined/clearly allocated financial and human resources, tools, and technologies. Organizations that are serious about achieving success on their OPM journey set aside the budget and aligned resources required to get the OPM results they desire.
Put accountability structures in place
Successful OPM deployment requires clearly defined roles and processes, governance structures, and assigned accountabilities. Accountabilities for OPM, including expectations for performance and behavior, must be built into employee job descriptions and the corporation’s people performance management process. Including OPM accountabilities in employee goal plans and assessing employee success in executing their accountabilities must be part of the performance appraisal process. Rewarding and recognizing the completion of required OPM accountabilities is the best, and fairest, way of ensuring that OPM activities actually happen as required/desired.
Identify a permanent owner of the strategy management process
Strategy management is a key business process that frequently goes without a dedicated process owner. Lack of dedicated ownership results in the sub-optimization of the strategy management process and progress on the OPM journey. Successful organizations assign a designated process owner or implement a team, such as the Office of Strategy Management, to lead the strategy management process. In this role, the process owner must have a direct line to, and trusting working relationship with, the chief executive. This allows the strategy management process owner and the chief executive to form a powerful team that is able to move the OPM agenda forward quickly and effectively.
Focus on making strategy the way we work
A key to ensuring strategy execution success is building strategy into as many business processes as possible. Typical opportunities include the budgeting, reward and recognition, communication, compensation, and people performance management processes. Successful organizations know that building strategy into as many business processes as possible makes it more visible to their organization and enables higher levels of organizational alignment (which is critical to ensuring the achievement of their organizational strategy).
The most critical point here though is that, to maximize the returns on your OPM investment, every critical success factor on this list MUST be in place – if even one is missing or if any of these factors aren’t firing on all cylinders, the result will be sub-optimized OPM results. Unfortunately, this fact rarely gets discussed with/by executives before they jump on the OPM band-wagon and that’s too bad because a lack of understanding of what they and the organization really have to do to achieve success is the #1 reason, in my experience, why business leaders end up disappointed with the results achieved through OPM.
If your organization is considering starting on an OPM journey OR if your OPM journey is currently producing under-whelming results, I’d encourage you to review the list above and then answer these questions:
What aren’t you prepared to commit to/haven’t you committed to?
What items have you missed? Why?
What is your organization prepared to actually do to close these gaps? Why or why not? (What’s getting in the way of making the required commitment?)
In my experience, your answers to these questions will have a direct bearing on the business success you can realistically achieve through your organization's OPM efforts.
Posted at 08:00 AM in Business Transformation, Organizational Conversations, Strategy Execution, Strategy Focused Leadership, Strategy Focused Organization, Strategy Management | Permalink | Comments (1) | TrackBack (0)
Tags: commitment to conversation, make organizational performance management a priority, office of strategy management, OPM, organizational performance management, organizational performance management critical success factors
Most organizations I work with put significant effort into collecting their business performance/Balanced Scorecard results data and creating results reports. So much so that everyone (from data collectors and owners, to executives and strategic objective owners) is relieved when the process is done.
However, what if I told you that all that work your organization puts into collecting data and producing those reports is just the beginning of the high-value work and NOT the end? Would you be surprised?
What I mean by my statement is that, if you want to reap the REAL benefits of your organization’s strategy management efforts you’ve got to move from a focus on performance measurement (i.e. the scenario I described above) to a focus on performance management.
When your organization makes this important shift in its focus, data becomes the beginning of a high-value, strategy-focused conversation, rather than just the end of a necessary, but somewhat mechanical, process.
Many organizations hold results review meetings that look and feel like this: Executives and senior leaders approach the meetings with dread because they’re a boring regurgitation of the minutiae of an interminable number of performance results reports. Detailed performance results are reviewed by business unit silo, presenters take a “duck-and-cover” approach to discussing areas of underperformance, and vague, issue-specific improvement plans are offered when color-coded business performance demands it. Everyone is happy to leave these meetings so that they can get back to their “real work”.
I know that this sounds depressing and it is. However, this is exactly what happens in countless organizations. And it’s precisely what you get when you are focused on performance measurement, and when data and report production is the objective of your work.
In contrast, when your organization’s focus is on performance management, your objective is to use performance results to better understand your strategy, to assess its progress and identify key, cross-company strategic issues and risks, and to develop plans to keep your strategy moving on a forward trajectory. The only way to do this is to leverage data and performance results to explore your strategy and situation in a forum that enables honest sharing, information and knowledge exchange, learning, and collaboration.
When you do this, data acts as the catalyst for high-value conversations.
Making the transition from a focus on performance measurement to performance management requires a subtle but important shift in emphasis – from pure results reporting to analyzing results with an eye to discovering the implications for your organization’s business strategy and strategy execution capabilities. When this shift is successfully made, “results review meetings” take on a new flavor and have a new vibe – they become interesting, “must attend” events where the juices flow, important organizational connections are made, and exciting things happen.
Here are the keys to having this new kind of meeting in your organization.
First, ban results review discussions from your meetings – forever! This doesn’t mean that you’ll stop assembling business performance results data and producing preliminary analysis on results (remember – you need data to begin the conversation!). However, gone are the days when meetings are consumed by results data reviews. Begin with the expectation that relevant data and analysis will be reviewed by attendees prior to coming to your new strategy discussion meetings.
Set up your new meeting to focus on exploring a series of questions that leverage performance results data and its preliminary analysis:
● What help or advice would you like from the group to help you resolve a specific business issue or problem, improve performance, gain deeper insight into an issue and/or its drivers, etc.?
● How has our strategy (i.e. strategic objectives and priorities) been performing over the past quarter? Looking at the organization as a whole, what are our results telling us?
● What are the implications for strategy execution? Are we moving forward? What’s getting in our way?
● What are our key strategic issues and risks (and how should we respond)? Do we have any systemic (cross-organizational) issues and/or risks? What are the root causes and what must we do about them?
● Is there anything going on in our external environment we need to be aware of and what are the implications for our strategy/strategy execution plans?
● Is our strategy “working”? Why or why not? How do we know?
● What, if any, changes are required? What are they and by when? How will they help us move forward and how will we know that they have worked? What will be different, how, by when?
Now - who wouldn’t get excited by a meeting that allows you to dig into such meaty and meaningful questions and discussions?
This is exactly what making data the beginning of the conversation looks like in action!
Is your organization focused on performance measurement or performance management? Your response will determine whether you are sub-optimizing your strategy management efforts or engaging in high-value activities that deliver a significant ROI (i.e. strategy execution success and business performance results achievement).
How can you tell where the focus is in your organization? Just ask and answer this one simple question:
Is data the beginning of the conversation or just the end of a process in your company?
Your answer will tell you exactly what you need to do next to get the most out of your strategy management journey!
Posted at 08:00 AM in Balanced Scorecard, Business Performance Measurement, Critical Business Issues, Organizational Conversations, Strategy Focused Organization, Strategy Management | Permalink | Comments (0) | TrackBack (0)
Tags: business performance results data, business results reports, how data can act as a catalyst for organizational conversations, performance measurement versus performance management, strategy-focused conversations, using Balanced Scorecard results, what questions should we ask during strategy discussion meetings?, what strategy discussion meetings should look like
Interestingly, the topic of mission statements, and whether organizations need them, came up several times last week. First there were debates in a few of the LinkedIn groups I belong to and then a Master’s student in the strategy mapping class I was leading at the University of Waterloo challenged me on the relevance of mission statements. More specifically, he referred to thoughts from Guy Kawasaki advocating for mantras (defined by Kawasaki as a 3 - 4 word phrase that helps employees truly understand why the organization exists) versus missions.
So what was going on here I wondered? Why the sudden backlash against mission statements? Here’s my take on it all.
First, let’s agree on what a mission statement is. A mission is a statement of an organization’s purpose – what business it is in, what impact it hopes to make on the lives of the people the company touches, and the (unique) value it brings to the world and society. When I work with clients to help them create their mission statement, I tell them that it should be short (7 words or less is ideal because you want employees to be able to remember your mission), inspirational, and aspirational. Your mission should be something that your organization is always striving to achieve realizing that you’ll never “get there”. In addition, your mission should endure for as long as your organization is in the business you are in.
In my view, a mission statement is for everyone, not just employees. Your mission is your commitment to the world about who you are and the contribution you are striving to make by existing. Most importantly, a mission is an important guide for company leaders and employees during difficult times. A clear and well understood mission (supported by solid core values) can make it easy to know exactly what doing the right thing in a tough situation actually looks like. For example, a clear mission and strong core values made the decision to pull all its product off store shelves an obvious response for Johnson & Johnson during the Tylenol scare in the 1980’s.
Now whether you want to adopt my view on what a mission statement is or whether you want to call it a mantra as Guy Kawasaki suggests, I really don’t care that much. However, a key imperative is that your mission/mantra must be short so that everyone can remember at a moment’s notice what the company is here to do and relate it to/apply it in the work they are doing, including the business decisions they are making, every day.
A common understanding of your company’s mission across your organization lays the foundation for consistency in action and your customer’s/stakeholder’s experience of your organization (two keys to long-term business success). For these reasons alone, every organization absolutely does need a mission statement.
This includes private sector companies where the pursuit of profits/profitable business growth is a key business goal. In these cases, a mission statement, as I defined it earlier, serves as an important anchor that helps keep for-profit organizations from crossing over to the dark side of seeking financial gains at all costs.
However, what I think was driving the spike in talk about whether or not organizations need mission statements has more to do with the misunderstanding many business leaders have about the real way to use mission statements in their organization and the disconnect in many companies between the mission statement/purpose of the organization and day to day action.
Here’s the thing.
If your mission statement is just some collection of words posted on the wall that employees don’t feel connected to and can’t remember then you may as well not even take the time to create one. A mission statement is meant to be lived by everyone in the organization from the executive level to the front lines. If it isn’t inspirational, doesn’t convey passion and emotion, and doesn’t drive aligned action, your mission statement is dead in the water. Your mission statement has to reach out and grab the hearts of your employees and everyone who is touched by your company.
How can you do this? By involving employees and stakeholders in the process of creating and living your mission statement – that’s how!
Some people will tell you that a mission statement shouldn’t be created by committee. They suggest that writing an organization’s mission statement should be the job of the chief executive after receiving input and advice from others. Now, every organization is different but I have to say that my preference is to include a broad, representative group of employees in the mission statement development process. In my experience, when the work includes a review of the outlook for the business environment and the needs and expectations of stakeholders, and a discussion of the unique value the company provides to customers and stakeholders, employees will do a wonderful job of creating a remarkable mission statement. In fact, I have found that when you have them work with the backdrop of the discussion outlined above, small sub-groups of employees will come up with remarkably similar and equally powerful mission statements. By having everyone, including executives, work together to create a mission statement for your company that leverages the ideas coming from any sub-group work, the outcome is always an emotionally charged, clear, and concise statement of the organization’s purpose that everyone can get behind and put into action every day without reservation.
While getting employees involved in the mission creation process sets the stage for real mission implementation, there are some additional steps business leaders must take to ensure that the mission statement reaches its potential and has the maximum impact on their organization. Everyone needs to feel and live your company’s mission passionately every day and they need a little help to do just that!
First, when introducing your organization’s mission to others don’t just say the words, tell a story.
Who does your company serve and what benefit do they receive from interacting with your organization? How does this make them feel? How does an individual employee put your company’s mission into action through their work and how does it feel to play a part in delivering your organization’s purpose everyday?
Better yet, help everyone in your organization participate in telling this story. While hearing your mission translated into a story will help it stick in people’s minds, hearing the story from a peer and being able to tell the story themselves makes your mission that much more salient and memorable for your employees.
Next, bring your organization’s mission into everyday business conversations wherever it makes sense. Add a discussion about the alignment of an impending decision with your company’s mission into the decision-making process. Have a conversation with employees about how the work of their team supports the organization’s mission. And train managers and supervisors how to recognize, and remark on, the actions individual employees take that demonstrate the mission in action.
These are just a few of the ways I have seen companies tear their mission statements off of the wall and bring them to life in a way that has a real impact on employees and stakeholders alike.
Call it a mission or a mantra, your company must clearly define and communicate its purpose and value to society in a short, memorable, and compelling way that touches the heart of everyone who is associated with your organization. Your mission should be developed through a collaborative process that enables many people to blend evidence, emotion, and dialogue together to reveal the soul of your company. Only when your mission is shared as an ongoing story does it come alive, serving as a compass that helps your organization put your mission into action, living your purpose every day.
In the end, your company’s mission statement/purpose plays a key role in bringing your business strategy to life, moving your organization forward in a positive and valuable way – and that’s the reason why your company absolutely needs a mission statement.
Tags: bringing your mission statement to life, Guy Kawasaki on mantra versus mission, how to create a mission statement, how to put a mission statement into action, mission, mission equals purpose, mission versus mantra, purpose, what is a mission statement, why an organization needs a mission statement
2013 will be a busy year for you and your company. You want to get ahead but don’t have lots of bandwidth for complicated solutions that fix small problems and you have even less of an appetite for solutions that come with a hefty price tag. Does this sound about right?
In my experience, organizations that make the biggest strides forward limit their priorities to a manageable number (three maximum is a good target) and then they focus their efforts relentlessly on seeing those few priorities through. The key to their success is taking a deep dive on the limited few objectives, strategies, and initiatives that will deliver the biggest returns for their business based on the context of where they are trying to go and what they are trying to achieve over the long term.
But, how do you know what your options are and, more importantly, what priorities to invest in? Making these choices can feel very risky so most business leaders hedge their bets and seek to minimize the risk of “picking wrong”.
However, what if there was one “risk free” business priority that, if you focused on it alone in 2013, you’d move your business forward significantly next year – regardless of what your company’s business strategy, goals, and objectives are?
That one risk-free priority that every organization should implement and can benefit from in 2013 is CONVERSATION and, more specifically, building a culture of conversation.
Quite simply, conversation involves engaging employees, customers, and other stakeholders in a process of two-way dialogue, at a personal level, and through a variety of methods, in an environment and culture that values honest input and feedback and enables thoughtful discussions and the exchange of ideas.
Let’s take a closer look at what your focused conversation efforts should involve in 2013.
Conversations with Your Employees
When it comes to talking with employees, many business leaders I know already host discussions and engagement forums with their employees, ranging from planned, invitation-only lunch meetings with the CEO to ad hoc one-on-one discussions between individual employees and executive team members. Typically the objectives of these interactions include making the top executive visible and accessible to employees, communicating the customer and business strategy and key company directions to employees, receiving feedback from employees on product and company performance, and collecting employee opinions regarding opportunities for improvement.
While these conversation vehicles are good, the key is to enable two-way communication, dialogue, and conversations all levels of your organization and capture their content so that everyone can learn and benefit. Having these kinds of conversations inspires levels of commitment and emotional investment from employees that make all the difference to business outcomes and results.
Why is this the case? Because engaging in meaningful and productive conversations with your employees shows them that you care and value what they have to say. In other words, it demonstrates that you are committed to and invested in them. Employees return your investment with investment of their own in the form of caring about, and being committed to, your company and the work they do for your customers. Invested employees are loyal employees. Loyal employees create the conditions needed to develop loyal customers. And loyal customers are the foundation of profitable business growth for your company.
Also, as an added benefit, it turns out that getting everyone in your organization talking together allows you and your employees to share what is, and isn’t, working, learn and innovate collaboratively, and get on the same page moving forward in the same direction together. All this translates into greater organizational efficiencies and exceptional business performance through an accelerated innovation curve, more aligned business decision making, better customer and market intelligence, and increased corporate agility when facing change.
Conversations with Your Customers
Equally important are conversations with customers. Market-leading companies understand the potential and value of having customer conversations on multiple levels. As a result, they don’t leave customer conversations to chance. That is, they plan their approach, including which customer will be contacted when and at what frequency; define the process; distribute accountabilities; invest in and maintain the required infrastructures, tools, and resources; and build employee skills to maximize their organization’s capability and capacity to engage in quality, high-value customer conversations and leverage key learnings. All of this takes active leadership support and engagement, and budget dollar allocations. And while there is always a plan for enabling customer conversations, these companies are also ready for customer interactions to happen spontaneously anywhere, anytime, and at any level of their organization. By equipping all of their employees to be knowledgeable and effective customer ambassadors, market-leading companies build the ability to have and capture customer conversations no matter where, when, and how they take place.
Most successful customer conversation plans include a suite of interaction points and vehicles. Traditional approaches include one-on-one customer interviews, account reviews, and focus group sessions. More recent vehicles include social media platforms to engage in customer conversations before and after interactions. There is no doubt that these vehicles, mechanisms, and opportunities will only expand over time. When designing your customer conversation plan it is important to begin with your intentions and objectives and the unique communication preferences of your customers themselves.
Focus on Creating a Culture of Conversation
While it’s important to engage in employee, customer, and stakeholder conversation activities and interactions, don’t make the mistake of assuming that it’s all about communication venues and tools. It’s important to realize that, without a specific context and the support of the right culture, organizations deploying these tools alone won’t achieve the full benefits of engaging their employees, customers, and other stakeholders in dialogue. What’s really required for success is conversational leadership grounded within a culture of conversation.
The required culture is one that creates an environment that is “safe” and supports open, honest, and productive dialogue. A safe environment is respectful, encouraging, and supportive, and is free of destructive criticism, judgment, bullying, grudges, and repercussions for sharing constructive insights and feedback with others, including direct managers and senior executives.
To build this type of culture, you’ve got to focus on building processes and an environment that supports, encourages, and cultivates conversations that have purpose and create greater understanding and deeper levels of connection. You must commit to setting the stage for dialogue that features the exchange of questions, comments, ideas, insights, and feedback, and inspires knowledge sharing. It is critical to model this behavior at all levels of your organization. In addition, you must enable employees to share ownership in the topic of, and the mechanisms for, conversation. This includes helping them: bring their own ideas to the discussion; participate in creating (and recreating) the content that is being discussed; and, ultimately, become conversation leaders themselves.
When they take place in a culture of conversation that looks like this, conversations and engaging two-way dialogues thrive and produce the best customer and business outcomes and results possible.
To achieve the transformational business results and profitable business growth you’re looking for in 2013 your best bet is to focus on building conversation and, more specifically, a culture of conversation right into your company’s DNA. If you do, I can guarantee that 2013 will be one of your best years yet. You’ll be on the road to having an energized company that attracts customers like a magnet because it delivers the value it promises consistently and reliably.
So here’s to a great 2013 for you and your organization.
I'm looking forward to hearing the story about how your organization’s singular focus on, and investment in, conversation has been rewarded with high levels of employee and customer loyalty and breakthrough business performance and growth!
Tags: achieving profitable business growth in 2013, achieving transformational business results, big ideas for 2013, business resolutions for 2013, conversations with your customers, conversations with your employees, creating a culture of conversation, organizational conversations