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.  

 

Don’t Bet on Strategy Maps and the Balanced Scorecard ALONE Translating into a Prosperous 2012

Are visions of strategy maps, balanced scorecards, and/or any other organizational performance management tool dancing in your head as you plan for a better business year in 2012? While adopting any combination of these tools will probably result in some improvements in operations and business results over the next year, you won’t achieve the transformational organizational shift that translates into sustained levels of exceptional business performance if implementing these tools alone is all that you do.

In fact, at the risk of sounding extremely Grinch-y as we close out 2011, you are actually better off not even starting down the strategy map-balanced scorecard adoption path if you aren’t prepared to go all the way with your commitment. That is, to achieve business success in 2012 and beyond, you need to implement the “new way to manage” - it's required if you want to unleash the full potential of all those business performance management tools we seem to grab onto in our quest to achieve the next level of business performance.

Let’s look at the key elements associated with this “new way" to manage.

 

Engage in Open Communication

Successful organizations are open and communicate their business strategy and objectives clearly, concisely, and completely with all of the internal and external stakeholders including employees at all levels of the organization, their customers, and their business partners. To do this, they get to know the communication preferences of each audience and use numerous communication vehicles to get their messages out. In addition, they focus on building mechanisms that encourage meaningful, two-way communication and dialogue, not one-sided messaging.

This level of communication doesn’t happen by accident – it takes planning, adequate support and resourcing, appropriate funding, and a dedication to focused execution and improvement. If communication in your organization is haphazard or sub-optimized, a new business performance management tool will most likely get lost in your organization. Few people will know it exists, limiting the impact it can have on the performance of your organization.        

 

 

Change the Conversation

What do conversations look like in your organization? What do they focus on?

If you are like most, they revolve around operational matters and fighting today’s crisis. Discussion and decisions are likely top down in nature with senior management determining direction, strategies, and tactics with the expectation that employees will execute them as directed. When you take the time to look at business results, you might find that you and your colleagues debate the accuracy of data, argue about the interpretation of the results, and speculate on whether an unexpected result is a one time occurrence or a trend. If this sounds like your organization, you are not alone.

While successful organizations do deal with operational activities and decisions, and firefighting, they also make sure that they spend adequate time exploring and discussing strategic matters on an ongoing basis. They engage employees at all levels of the organization in an ongoing dialogue about what the organization should be, how it should get there, how it’s doing/performing, and what should be done to improve. They create multiple venues and opportunities for these conversations to take place including business results review sessions where the root cause drivers of performance results and the impact of current performance on the future success of the organization are discussed, and evidence-based corrective action plans are created and debated.

The introduction of a new business performance management tool such as the strategy map or the balanced scorecard offers an organization the opportunity to engage with new business information and stimulate new kinds of conversations across the company. Organizations that introduce these tools without changing the nature of their conversations never reap the full potential the tools were meant to deliver.     

 

 

Set Clear Business Priorities

Success in business is as much about deciding what NOT to do as it is about deciding what to do. This is critical when defining direction and business strategy. And it is equally critical when making business decisions about relative work efforts, resource allocation, and dealing with day to day work demands. Successful organizations determine a small set of strategic priorities and then leverage their business performance management tools to communicate, test and validate, and revise their business priorities. They also use these tools to give employees at all levels of the organization the information they need to make day to day business decisions that align with organizational strategy and strategic priorities.   

If your organization doesn't do a good job today at prioritizing work and decisions, and does not use the introduction of business performance management tools as an opportunity to develop this capability, you will find that implementing any tool puts an additional and unwelcome strain on the overall capacity of your organization. Rather than seeing your business performance management tools as a help, you run the risk that employees will become resentful of them because (1) the tools have added additional strategic considerations to the overall work of the organization; and (2) utilizing the new tools has created additional administrative work for them.

When introducing business performance management tools such as strategy maps and the balanced scorecard, be sure to also take the opportunity to use them to identify and communicate a focused set of business priorities for your organization. These tools were designed to help you do this – wise adopters take advantage of this opportunity to focus the work of their entire workforce and organization.     

 

 

Build New Leadership Capabilities

Leveraging business performance management tools to get the most out of them and make the new way of managing “the way we work” at all levels of an organization is a new skill for many leaders, managers, supervisors, and employees. Managing in the new way often requires a complete change in behaviour from the previous operating and managing style and generally demands new levels of accountability from leaders and employees. Do not assume that simply introducing the strategy map or rolling out cascading balanced scorecards will automatically change the way managers lead and the types of discussions they have with their team members.

Successful organizations make their new expectations for manager and employee behaviour explicit and will then provide everyone with the education, training, and ongoing supports they need to live up to new expectations. In addition, they will offer everyone incentives to manage and work in the new way, including building behavioural and performance expectations into personal goal plans, and basing compensation on success in adopting these new skills and behaviours and building advanced levels of capability in this regard.

Don’t expect the introduction of new business performance management tools to magically transform the way your organization works. To achieve the changes outlined above and make them "the way we work", you must support tool implementation with a formalized programme that builds the appropriate skills and capabilities in every employee in your organization.

    

 

Many organizations implement strategy maps and the balanced scorecard in the hopes that these business performance management tools will provide them with the silver bullet they need to achieve improved business results over the long term. Unfortunately, the landscape is littered with stories about companies that abandoned their selected tool because it failed to perform to expectations and/or deliver the desired business results. In the majority of cases, when you dig deeper into the failure, you discover that the adopting organization simply rolled out the tool while managing in the same old way. Essentially, the sub-optimization of the tool was a result of failing to support it with the behavioural, cultural, and systemic changes required to receive the maximum benefits of business performance management tool utilization.

I think that there is one critical reason why organizations fail to go all the way when implementing a business performance management tool. While some just honestly don’t realize that the new way to manage is a key element of success, I believe that many organizations and business leaders are searching for a quick fix to their problems. Implementing a tool requires action, can be done relatively quickly, and the result is tangible – you can see a new strategy map or balanced scorecard when it is in place and it feels like progress. Culture, behaviour, and organizational systems are more intangible in nature. They can be difficult to change and often leaders are worried that it will take a long time to effect the change (particularly if they are unsure about how to do it). And when the change does happen, you often can’t see it easily (though there are some great assessment tools out there that can help you measure that the change is indeed happening).

Bottom line? Implementing a new business performance management tool is sexy while effecting the required cultural and behavioural change feels like work. However, without these fundamental changes, the business performance management tool you choose to implement will never live up to its potential for you and your organization.

 

Looking for better business performance in 2012?

Go ahead and adopt the business performance management tools that interest and inspire you the most - but also make a commitment to implement the new way to manage across your organization. The maximization of your return on your investment in business performance management and the achievement of sustained performance success in 2012 and beyond are dependent on it.

  

When Did Strategy Become a Four Letter Word?

After several meetings and discussions with colleagues and business leaders over the past few weeks, I’ve come to the sobering realization that strategy and, more specifically, strategic planning, has developed a bad name out there. More and more frequently, I seem to receive friendly advice telling me not to use the “S word” because it turns business people off. Just call it something else, or better yet, don’t talk about it at all they say – just convince “them” to do it without naming it strategy/strategic planning.

The unfortunate reality seems to be that, in many cases, executives and business leaders deal with strategy making and management because they know they should but they do so with a hesitation based in a real dislike for the process and the resulting plan (and distractions) it produces.    

Now, for me, someone who feels passionately about the value of strategy formulation and execution in driving higher levels of organizational performance success and more sustainable business results achievement, it’s really confusing, and worrisome, to think that strategy has become a dirty word in our businesses and organizations. So, I began to think about it and found myself wondering: Why is this the case? What is turning business leaders off?

How did strategy become a four letter word?

This is what I came up with.

 

1. Strategic planning can feel like a waste of time

The Problem: In a rapidly changing business environment, strategic plans are often out of date before they are rolled out. When this is the case, it’s easy to start to question the time, effort, expense incurred, and value associated with strategic planning activities. As a result, some organizations are swearing off the 3 – 5 year strategic plan and opting to complete 90 day plans that are really more tactical than strategic.     

The Root Cause of the Problem: The traditional approach to strategic planning no longer works in this dynamic business environment -

● It takes too long (6 months from start to plan production is simply too much time);

● It is too reliant on historical data (which doesn’t really help you move forward in uncharted waters) and doesn’t involve the people who know how the business really works in the strategy creation process;

● The plan it produces, as well as the annual planning cycle approach, aren’t dynamic and agile to change (reducing the relevance of the strategic plan as an effective business management tool) and the plan often ends up sitting on the shelf;

● The strategic plan is often a short to mid-term tactical plan that isn’t guaranteed to move the organization forward towards its long-term business goals; and

● No one in the organization (often including the executives that created the plan) really understands how to implement the strategic plan locally/in their everyday work activities (largely because it is written at a very high level and, though it seems to make sense, it’s unclear what implementation looks like below the corporate or executive level).    

The Turnaround Plan: Changing times require a different approach to strategy creation/formulation – one that works with, rather than against, a dynamic, often unpredictable business environment while still helping to chart a clear and understandable path towards the ultimate business goals of the organization. This new strategic planning process -

● Must be completed in weeks, not months;

● Leverages some data but is more reliant on their interpretation by, and the wisdom and intuition of, a broad range of stakeholders, including employees and key business partners, who participate hands on in the planning process;

● May involve an annual planning event but focuses more on quarterly strategy progress review and refresh/refinement sessions AND has mechanisms to identify, make and incorporate, and communicate required changes in the business strategy quickly, effectively, and efficiently at any time so that the strategic plan is always relevant; and

● Clearly lays out the long-term strategy to achieve the organization’s mission and vision AND both the mid-term (3 – 5 years) and short-term (12 – 18 months) business priorities, within the context of the long-term strategy, in an accessible roadmap format so that all employees and stakeholders understand what the key elements of the strategy are and what they look like in action. 

How to Learn to Like Strategic Planning Again: Drop the traditional approach to strategic planning and start formulating strategy using a fresher, faster, more dynamic, and agile approach.  

 

2. Strategic planning/formal plans introduce too much structure into the way we work

The Problem: While some people like process and structure, many do not. Strategic planning is a process that often produces a fairly prescriptive plan. As a result, those who have a more spontaneous approach to management can struggle with the rigor demanded by strategic planning.

The Root Cause of the Problem: On the surface, there are many perceived characteristics of strategic planning that seem to turn people off –

● Strategic planning is a deliberate process that is followed by a group of people to produce a certain result – if you dislike following processes, you probably won’t like strategic planning much;

● Strategic planning activities can be highly data driven with little to no opportunity for intuition and insights from a broad range of sources to make their way into the process – this makes strategic planning feel like a clinical process that is disconnected from the day to day realities of the business at the front lines; and

● A documented strategic plan can feel like it limits your options for individual creativity and innovation in your work.

While I see these concerns from time to time, and hear them presented as a rationale for disliking strategic planning, I think that they are really just convenient excuses. What I think is the true root cause driver here is a reluctance to (1) commit to a plan, (2) work together with others to implement the plan, including planning and possibly modifying personal actions based on their impact on others, and (3) be held accountable for one’s part in the successful completion of the plan and the achievement of targeted business results. Working with a strategic plan requires all this of everyone in the organization – no wonder it can feel like a scary proposition that is best to be avoided.  

The Turnaround Plan: Overcoming this particular problem requires a fundamental change in organizational beliefs and attitudes about strategic planning. To achieve this goal, co-operation is required from three sources which must be aligned with, and designed to support, the goal of helping people embrace the strategic planning process and its associated discipline.

Organizational and Management Processes 

● Business leaders, managers, and employees must commit to: adopting a strategic planning process that provides some structure and produces the desired results, follow and improve it moving forward, and stick with it over the long-term;

● Add strategic planning process and discipline to your organization but resist the temptation to go too far - the key is to add just enough structure to ensure that everyone is moving forward together in the same direction but not so much that there isn’t room for innovation and creative thinking, at all levels of the organization, about the best way to implement the strategy and get the organization to its intended goals;

● Management processes must integrate seamlessly with the strategic planning process, and the resulting plan, so that the business strategy (including strategy formulation and execution) becomes just a part of the way the organization works every day;

Supports and Rewards

● The organization must support business leaders, managers, and employees in their efforts to work on and within the strategic plan – this includes facilitating their involvement in the process by giving them the time away from their work to participate, and providing them with back up on the job;

● Business leaders, managers, and employees must be rewarded and recognized when they demonstrate the desired new attitudes and behaviors – this reinforcement helps sustain change across the entire organization; and

Leadership Behaviors

● Business leaders, managers, and employees must walk the talk and model the desired behavior at all times.

How to Learn to Like Strategic Planning Again: Focus on creating an organization, from top to bottom, that embraces the structure strategic planning provides and the commitment it demands.

   

3. The strategy execution failure rate is high

The Problem: Statistics have shown that the majority of organizations fail to actually do what their strategic plan says they’re going to do, so, many think: “Why bother planning in the first place?”

The Root Cause of the Problem: While strategy execution failure is a complex problem, there are typically four critical stumbling blocks that exist in the majority of cases including:

● Lack of employee buy-in for the plan;

● An unclear strategy execution roadmap;

● Unclear ownership accountabilities or no accountability framework; and

● Low levels of organizational alignment with the business strategy (including core processes and strategic projects, human resources and their skills and capabilities, and the plans (e.g. learning and development/human capital plans), tools and technologies, and resources (including budget dollars) that support the work being completed) 

The Turnaround Plan: Steps can be taken during the strategic planning process to reduce or prevent strategy execution problems including:

● Involving employees (as members of the strategic planning working team) in a meaningful way in the strategy creation process including making decisions in the key elements of the strategy and what they look like in action;

● As members of the strategic planning working team, help employees play the role of strategy ambassador throughout the organization and involve them in the roll out and implementation of the strategic plan;

● Develop your strategic plan in the form of a strategy execution roadmap that includes key strategic objectives, aligned business processes and strategic projects, and linked performance indicators – aligning processes, projects, and measures with your business strategy effectively links action with the strategy;

● Assign ownership (for strategic objectives, indicator data, indicator commentary, core business processes, and projects) across your organization, including clear responsibilities and target dates, that leverages current work responsibilities intelligently and build a culture of follow through within your organization; and

● Strive for maximum organizational alignment at all levels of the business with the elements of your strategic plan.

How to Learn to Like Strategic Planning Again: Leverage the strategic planning process to set the scene for strategy execution success. 

 

Strategy formulation and execution management are critical activities for any business that wants to achieve maximum organizational performance and sustained business success. The act of collaborating, talking about, and writing down your organization’s goals, and plans to achieve them, has a powerful effect on the amount of time and effort required to reach those goals, reducing them significantly for most companies.

If you want to avoid using the “S word” in your organization, I’ll leave that to you. However, the fact remains that successful companies have made peace with strategy (and the strategy formulation and execution management process) and have embraced it for the invaluable business management tool and process it is.

I believe that the key to success is not to avoid strategy but to adopt it on terms that make sense for your organization so that your business strategy/strategic plan can provide your organziation with all of the benefits it has the potential to deliver.

 

Why Organizational Alignment Should Matter to You (and how to get it)

After several years of good but not great business performance, perhaps you decided that, this year, it was time for a change. So you drew a line in the sand, declaring that your organization was FINALLY going to achieve stellar business results. However, now, more than half way though the year, it looks as though, yet again, it’s not going to turn out that way. So, what's happened?

A closer look at the levers that really drive better organizational performance and improved business results reveals that, while a clear vision of where your organization is going, an actionable roadmap to get there, and a system of measurement that provides feedback on progress and identifies opportunities for change are all important for success, organizational alignment is the secret ingredient that is often missing for many businesses.

 

What is organizational alignment?

Organizational alignment relates to the degree to which the components of a company are arranged to optimally support the intent, objectives, and goals of the organization (i.e. the business strategy). The components of the organization that must be “aligned” include:

● The work being completed (i.e. key business projects and work processes);

● The goals, skills and capabilities, and the hearts, minds, and behaviors of BOTH the people doing the work AND organizational leaders; and

● The plans (e.g. learning and development/human capital plans), tools and technologies, and resources (including budget dollars) that support the work being completed. 

Organizational alignment is both a process and an outcome. Building and ensuring organizational alignment requires focused action and is an ongoing activity. In addition, the outcome of these organizational alignment efforts - the degree of organizational alignment present - can be assessed in a company at any point in time.

Organizational alignment is BIG and covers a lot of ground - that is why I think many organizations struggle so much with it or just give up on it all together.  

 

 

Why Organization Alignment is Critical for Business Success  
 

 
 

Have you ever watched the rowing eights event at the Olympics? Now, think about the performance of the top teams – what do you see? Look closely and you'll see nine people (including the coxswain) working together in synchrony to achieve their primary goal of crossing the finish line first.

To achieve success, the rowers must stroke at the same pace with the blades of every oar pulling at the same depth in the water. They all know the overall game plan for success and they are ready to respond to the orders of the coxswain (who’s job it is to quarterback the execution of the race strategy and communicate the adjustments that keep the boat on course in changing wind and water conditions) as individuals AND as a cohesive unit. Each member of the team knows what their job is during the race and that they can rely on their coaching, training, boat, and equipment, and the skills, technique, and commitment of their teammates while the race is on.

With all this in place, teams power their boats on a straight course, translating 100% of their effort into the forward movement that moves them closer to their goal. However, when team alignment and cohesion is off, the boat strays off course, essentially wasting time, energy, and the resources that were invested in trying to achieve the goal of winning the race.       

It’s very much the same for an organization. Without alignment, the best strategic plan will never be fully achieved because organizational alignment is the glue that makes strategy execution excellence happen. An aligned organization works together as a unit in a new way (i.e. more efficiently, effectively, and dynamically) on the right things that deliver the greatest business value. An aligned organization gets things done faster, with less effort, and with better results, and is more agile and responsive to changing business conditions.

Ultimately, a high level of organizational alignment is essential for achieving increasingly better business performance results now and in the future!

And THAT is why organizational alignment is so important for your business.

 

 

How You Can Build Organizational Alignment in Your Company

There’s no doubt about it - building organizational alignment is a big job. However, there are just six essential activities that contribute to the organizational alignment process and they must be completed on an ongoing basis as you work to build and raise the level of organizational alignment in your company.

 

(1) Define What Your Strategy is and What it Looks Like in Action

Organizational alignment is built on your business strategy so you must begin here. To be effective, your business strategy must clearly define your primary value proposition, your future results destination, and the values and behaviors that will guide your actions on the journey to business results achievement. While this content is important, it is also critical to describe the actions, in the form of strategic objectives, your company must focus on to get from the present to the future destination. A strategic plan that provides a specific but flexible roadmap for action serves as the guiding star for your organization and its alignment efforts moving forward.  

 

 

(2) Communicate Your Strategy

Your organization/people can’t align with your business strategy if they don’t know what it is. Strategy communications are a critical, ongoing requirement in the drive to build organizational alignment. Communication must be frequent and two-way at all levels of the organization using multiple communication vehicles and a variety of targeted messages. It is important to remember that there is no such thing as over-communication or too much business leader involvement when you are striving to create an aligned organization. 

 

 

(3) Cascade Your Strategy across the Organization

Results-producing action rarely happens at the corporate level of an organization alone – results are usually achieved through the combined contributions of business units, departments, and teams. As a result, it is important to cascade strategy vertically and horizontally across your company and define the local actions and contributions each area of your organization must make to achieve business success. By defining these unique contributions and clarifying the shared ones, your organization will become more integrated, efficient, and successful in executing your business strategy.

 

 

(4) Link All Work Activities with Your Strategy

No organization has the capacity, time, or resources to waste on work that does not support strategic objectives and business success. As a result, it is necessary to take an inventory of key business processes and projects and determine whether they link to and support the elements of your business strategy. Sometimes you will find that work only indirectly supports the completion of strategic objectives – work of this kind is worth continuing because a link with the strategy still exists. However, when non-strategic projects and processes are identified, business leaders must seize the opportunity to stop doing them and re-invest organizational work capacity into more strategic work. Making decisions about the strategic value of the work completed in your organization can make the difference between a more efficient, high performance organization and one that wastes effort unnecessarily.

 

 

(5) Link All Employees with Your Strategy

Work gets done in your organization by people – either through the processes they play a role in and/or the projects they work on. Once business processes and projects have been aligned with your business strategy, it’s an easy next step to link the people who do that work to the strategy through their daily process and project contributions. Alignment at the employee level begins by helping them see how their work links with the business strategy – this makes strategy more meaningful to everyone in your organization. Next, it is important to let employees know what they need to do in their work to contribute to the overall results. Do this by creating individual goal plans that have clear linkages with your business strategy and provide performance guidelines that will help them move the business forward. Finally, give employees the opportunity to generate and share their insights and ideas on local ideas for improvement that could have a big impact on your business strategy. All of this plays a critical role in solidifying organizational alignment at the employee level. 

 

 

(6) Ensure that Necessary Financial and Non-Financial Resources are in Place to Support Your Strategy

Strategic plans usually involve doing something new and/or different. Why do companies expect to make the associated changes when they don’t put adequate resourcing behind the required efforts? New business strategies often require new employee skills and capabilities – this in turn often requires an investment in training, learning, and development. New directions may require new tools, equipment, and technologies and/or new roles and new people - all requiring budget support. Ensuring the alignment of your company’s budget development process, and the budget itself, with your business strategy is a fundamental but often forgotten component of building organizational alignment.

 

 

Organizational alignment can’t be achieved overnight but it doesn’t have to take a long time either. It just requires a solid plan and focused effort.

Chances are good that you have some of the required elements in place right now in your organization so your first step is to conduct an organizational alignment assessment. A good assessment tool will give you an idea of the current level of organizational alignment in your company AND pinpoint key gap areas and/or opportunities for improvement. With this insight in hand, you will then be able to create the targeted action plan you need to improve the level of organizational alignment in your business and get everyone mobbing in the same direction – producing extraordinary business performance results!

 

Is your organization aligned and ready to execute your business strategy? Are you sure? If you would like to be able to answer these important questions quickly and with confidence, click here to find out how.

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.

New Name, Sharper Focus, Same Passion and Commitment!

My mantra and encouragement to all of my readers over the past few months has been to bring greater FOCUS to their business. A good recommendation for all of us as we manage and grow our companies and organizations - so good that I have taken my own advice!

If you look carefully at the header of this blog you will notice something different – a new name and a new look. I am pleased to introduce you to JETrichardson – the newest member of the Strategy Focused Business Solutions family!

Our new name is very much aligned with the focus of JETrichardson - to cut through the complicated and convoluted ideas, language, and offerings that are out there and provide business leaders like you with streamlined, fast, effective, and practical, value-producing services and solutions that: produce the actionable roadmaps for success you need; create the organizational capabilities and employee engagement you want; and help you execute strategy and achieve the exceptional business performance results you demand.

Please visit our NEW WEBSITE to explore further and discover how JETrichardson can help you transform your organization: www.jetrichardson.ca. I hope that you like the site!

The one thing that hasn’t changed is my passion for, and dedication to, helping business leaders and committed people change the way their organizations work and achieve great business results now, and over the long term.

My passion (and mission) is helping organizations transform and deliver exceptional results for employees, customers and stakeholders, business partners, shareholders, and society. JETrichardson is just a continuation of my commitment and deep belief that, together, we can build organizations that are great, and beneficial, for everyone involved.

If you like this idea, I have something special for you. Please watch the video found on any page on the JETrichardson website – it’s called “Transform the Way Business Works”. I hope that it will inspire you to take action! And if you love the video, I hope that you’ll share it with everyone you know – let’s see how many people we can inspire together!

So here’s to JETrichardson. I hope that you’ll visit and explore the site often.

While you’re there, I hope you’ll join the JETrichardson Community – a new meeting place for people who share the passion for transforming the way business works. And I also hope that you’ll call and/or email me anytime so that we can continue the conversation on improving the way organizations (maybe even your organization?) work!

sandy@jetrichardson.ca                       

(416) 722-1367  

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.

The Short-Term versus The Long-Term – Can Organizations REALLY Manage Both?

There is no doubt that there can be serious tensions between short-term and long-term objectives and decisions in business. However, I would argue that the pressures currently faced by organizations and leaders in the public sector (e.g. demands by the street and shareholders to demonstrate quarter over quarter profitable growth; incentive bonuses based on performance against annual business targets; etc.), the public sector (e.g. a change in policy and/or agency leadership as a result of a change in the party in power), and the not-for-profit sector (e.g. shifting projects and areas of focus based on the issue-du-jour and/or the policies of the governing political party) are actively diverting the attention of organizational leaders away from managing this tension, placing it almost solely on short-term matters and decisions.

This needs to change because taking a short-term business focus ALONE can be disastrous for an organization.

For many businesses, short-term decisions lead them into blind alleys and business dead ends that can be extremely difficult to get out of. If they are lucky, business leaders can back their company out of these situations and recover from any associated business losses. However, over time, with a persistent focus on the short-term, organizations and their leaders often wake up at some point in the future only to find that they are in a place they don’t want to be. In the worst case scenario, today’s short-term decisions, made without thinking about long-term ramifications, can destroy the long-term value of a company. That is, the short-term business decisions made today could be seriously limiting the long-term viability and sustainability of a (your?) company.

Shouldn’t the number one concern of every organizational leader out there be making sure that their company will be here tomorrow? I think that it should.

The key to ensuring long-term business viability is: (1) to help our business leaders realize that they must include both short-term and long-term business objectives in their decision-making; and (2) give them the tools and training they need to manage the tension between the two better.

Managing both the short-term and the long-term is truly a balancing act. It is easy when a short-term objective, decision, or action will also benefit the long-term objectives of an organization. More often than not, the relationship isn’t so easy. Often, a short-term objective or decision will have some negative consequences in the long-term. And, sometimes, a short-term decision with a positive impact on the long-term is very unpopular today (increasing the pressure NOT to make this decision or take the unpopular action). When these situations occur, tradeoffs are usually required. So, how can business leaders make these tradeoffs in the best way possible?

The key to success is to make short-term and long-term business objectives visible at all times and place them front and centre when strategic business decisions are being made. This will facilitate conscious decision-making – making short-term decisions with a full understanding of, and consideration for, their long-term impact and ramifications.

The best tools available for helping leaders do this successfully are the weighted strategy map and the balanced scorecard (BSC). First, the strategy map gives organizations the opportunity to put all the elements of their value creating strategy on one page – side by side. Remember that the strategic objectives on a strategy map are meant to work together to achieve an organization’s mission (you can’t get more long-term than that!). Weighting some of the strategic objectives on the strategy map then allows business leaders to identify some of the short-term priorities for the business. However, it is important to note that, even when weighted, all of the strategic objectives on the strategy map remain “in play” – this is how the weighted strategy map helps keep short-term AND long-term objectives and priorities at the centre of the decision-making process.

Balanced scorecard indicators, when selected based on their alignment with strategic objective definitions, give business leaders data and valuable information about strategic business performance and highlight, very visually, when various strategic objectives are underperforming/are at risk. Sometimes, actions and business decisions will result in positive performance results for short-term priority objectives (i.e. the more highly weighted objectives) while having a negative performance effect on longer-term priorities/objectives. The value of the BSC is that it makes these cause and effect impacts visible to business leaders and decision makers. With information about the performance of both short-term and long-term objectives available for consideration, business leaders are in a better position to make conscious, informed tradeoff decisions. While business leaders may still decide to take short-term action that will have negative consequences in the long-term, the BSC helps them understand that this is the case and allows them to monitor the impact over time on long-term objectives via the BSC, and then take remedial action to improve results for the long-term objective when required/the time is right.

The key in business is not to shy away from managing the tension between short and long-term business objectives and decisions – this tension exists whether you want to face it or not. Organizations that fail to consider both the short and the long-term run the risk of negatively impacting the long-term viability of their company. The best advice for sustainable business success is for business leaders to acknowledge that both the short and long-term aspects of their business need to be consciously and actively managed and then to do it in an informed and transparent way leveraging the weighted strategy map and the balanced scorecard.

The long-term viability of your organization is depending on it!  

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!