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

How to “Do” Change Management without Doing Change Management

 

I have to confess – I don’t quite "get" change management as a stand alone discipline.

My confusion is probably fueled by the fact that, when you look at successful organizations, one of the hallmarks of their success is that they seamlessly integrate critical and powerful “how” elements into “what” they do.

What exactly do I mean by “what” and the “how” elements? Well the "what’s" are all the business activities an organization may choose to execute as part of its operations. From strategic planning to accounts payable process execution to business project management to a merger or acquisition – these are all fundamental business processes or activities. “How” elements relate to the way an organization goes about executing its business activities including the people side of the equation and the tools, resources, and infrastructure required to get the job done (and to do it well).

 

Basically, what I’ve observed is that successful organizations design people involvement and appropriate resourcing right into their business activities. And, in my experience, by building appropriate and meaningful involvement of their people into business processes and activities, successful organizations virtually eliminate the need for ”change management” in the way people seem to conceptualize it.

More importantly, what I’ve learned is that when you seamlessly integrate the principles of successful change management right into your organizational culture (i.e. into the way your organization fundamentally works), change management as a stand alone discipline just doesn’t make sense/isn’t required.

 

Change is a constant in organizations today. An evolving economy demands it. Changing customer and stakeholder expectations require it. Rapid advancements in technology enable it. And the internal drive for operational excellence/cost effective operations supports it. Today, it’s widely agreed that agility, or the ability to pivot and change direction quickly (and often in a transformational way), is the key to survival for many organizations. Change is the new normal for organizations and their employees.

In my experience, leadership often starts looking for a change management expert either when their organization and its people demonstrate resistance to change or when the executive team fears that this will be the case. However, focusing on neutralizing employee resistance to change is, in my opinion, applying a solution to a symptom. The key to making a real impact and ensuring lasting business performance success is identifying the root causes of resistance to change and then taking action to appropriately address them in the "how" elements of your business activities.

 

First, let’s agree that some people embrace change more eagerly than others. A great article in the July 15/13 edition of The Globe and Mail on what motivates employees shows that approximately 9% of any given workforce is intrinsically motivated to seek change while almost one quarter of employees are most comfortable with stability. It excites me to know that this finding means that just over 75% of the workforce is more than likely receptive to change - under the right conditions.

When it comes to the most common drivers of employee resistance to change, consultant Torben Rick offers a list of twelve typical root cause issues: Misunderstanding about the need for change/when the reason for the change is unclear; Fear of the unknown; Lack of competence; Connected to the old way; Low trust; Temporary fad (belief that the change will be short-lived); Not being consulted; Poor communication; Changes to routines; Exhaustion/Saturation; Change in the status quo; and Unclear benefits and rewards.

 

In my experience, these root cause problems can be bundled into an even shorter list of key issues:

 

Communication: Much of the time, resistance to change is a product of poor or unclear communications. Recent research has shown that 70% of employees don’t understand their company’s business strategy – we can safely assume that this also applies to any significant change in the way an organization does business. In my experience, the reason for any given change is usually unclear to employees and the benefits and rewards associated with making the change are either not compelling or the case hasn’t been clearly articulated for them.

 

A Status Quo Culture: Many organizations have great core values that talk about embracing change, innovative thinking, and business agility however, when it comes to walking the talk, the organization, including its leaders, may demonstrate the exact opposite. Some organizations actually unknowingly reward status quo behavior despite having change-oriented core values! When this is the case, it’s no wonder that employees fail to embrace and actively participate in change. In fact, many employees will simply “wait out” a change when a status quo culture is the norm.  

 

Organizational Management and Leadership: While this is really a large bucket of related issues, in my experience, the primary drivers of resistance here are (1) a lack of prioritization of the work of the organization, leading to employee exhaustion, burnout, and low capability to take on/tolerance for net “new” activities; (2) a failure to adequately support new business directions with the required resources, tools and technologies, and employee training/skill building investments; and (3) a diminished level of confidence (on the part of leaders) in employees and their ability to contribute to improving business activities and effecting change. The outcome of any (and all) of the drivers in this bucket is low levels of employee trust in organizational leadership.

 

Employee Fear: When facing change, most employees wonder, at some level, “What does this change mean for me and my job?” In addition, almost all employees will have questions about the change that reflect their own personal situation and concerns. When the answers to these concerns aren’t clear, the fear of the unknown can be crippling for an employee – causing them to avoid engaging with an impending change rather than embracing it.

 

So – how do successful organizations deal with these critical issues and thereby virtually eliminate the need for stand alone change management interventions? It turns out that there is one significant thing they do that any organization can begin doing right away:

Make meaningful employee involvement part of the “how” of doing business.

What if you did more than consult employees when it comes to a change in any part of your business – what if your employees were actually in on/contributing to the change identification, definition, and decision-making processes? In my experience, allowing employees to participate in a real and meaningful way in defining the new future of your business (or an important business process or activity), and creating the solutions required to get there (1) produces a better vision for the future that employees truly understand, (2) delivers a roadmap for action that is actually executable; and (3) eliminates the need for additional/classic change management activities.

In fact, taking this one action ALONE is the most powerful thing an organization can do to enable agility because it neutralizes most of the elements outlined in each issue category mentioned above. For example, employee involvement as described above inherently makes the need for change and the associated benefits of that change clear; puts organizational core values related to change into action; allows leadership to walk the change talk by engaging employees in change discussions and decision recommendations; allows employees to identify and request the resources that are actually required to implement real change; and virtually eliminates fear because employees are able to actively define what the change looks like and what it will mean to work processes.

 

It’s my experience that, when this process is allowed to happen and employees are enabled by courageous leaders to really engage through the “how” of doing business, employees naturally transform into passionate advocates for all the changes your business may wish to undertake. In fact, they actually become powerful advocates and effective influencers amongst their peers and other employees.

And, when coupled with a dedication to clear, ongoing two-way communications across the organization, and consistent leadership behaviors that can be trusted to enable employee-supported change, organizations that design employee involvement right into their business activities - the "how" of doing business - generally find that, in the end, they don’t need to “do” change management at all.

The Truth About What It REALLY Takes to Make Organizational Performance Management a Success

I was recently asked what the critical factors for successful organizational performance management (OPM) deployment are. Rather than keep these CSF’s to myself, I thought that I’d share them here with you (listed in no particular order):

 

OPM is recognized as an organizational priority

For many organizations, implementing and adopting OPM represents a significant shift. An organizational change of this magnitude will almost certainly encounter resistance – often displayed as attempts to continue doing things the “old way” rather than placing a priority on new activities and efforts. The only way to make the required organizational transformation is to declare OPM an organizational priority and then follow through with aligned expectations for appropriate actions and behaviors.   

 

Full Executive and Senior Leadership Team commitment

In successful organizations, the chief executive, his/her team, and the senior management group must all be willingly to demonstrate active commitment to the OPM journey and take all steps required to enable its success. What does this “look like”? Walking and talking OPM and modelling requisite behaviors at all times and across the entire organization.

 

Employee availability, and active participation, in OPM processes

A key to developing organizational buy in for OPM, and producing high quality products and outputs (e.g. a strategy map, balanced scorecard indicators, etc.) during the OPM journey, is involving a broad range of employees (from multiple functions and levels) in a variety of OPM activities. The key to achieving the desired level of employee involvement is helping employees participate in working sessions and “homework” activities – this can only be achieved when managers: (1) communicate the importance and value of active participation in these activities to employees; and (2) take the steps required to release employees from their day to day duties so that they are free to participate in OPM activities.

 

Make a Commitment to Conversation

When it comes to strategy formulation and OPM, our traditional predisposition is to take a top down approach. That is, strategy is created at the executive level and then rolled down and out to the organization for execution. This approach has failed on so many levels for long enough that you’d think that we’d know better by now. Unfortunately, this isn’t always the case. These days, better business performance results are achieved when strategy formulation and execution/OPM are completed through a process of two-way dialogue that engages your organization and even other stakeholders. Yes – it can be messy and matrix-y, and require multi-tasking but it’s the only approach that enables agility in these constantly evolving, dynamic times. As a result, organizations that are committed to achieving success through OPM must also be committed to an ongoing process of dialogue and two-way exchange. 

 

Ensure appropriate infrastructure deployment

Successful OPM deployment requires defined/clearly allocated financial and human resources, tools, and technologies. Organizations that are serious about achieving success on their OPM journey set aside the budget and aligned resources required to get the OPM results they desire.

 

Put accountability structures in place

Successful OPM deployment requires clearly defined roles and processes, governance structures, and assigned accountabilities. Accountabilities for OPM, including expectations for performance and behavior, must be built into employee job descriptions and the corporation’s people performance management process. Including OPM accountabilities in employee goal plans and assessing employee success in executing their accountabilities must be part of the performance appraisal process. Rewarding and recognizing the completion of required OPM accountabilities is the best, and fairest, way of ensuring that OPM activities actually happen as required/desired.

 

Identify a permanent owner of the strategy management process

Strategy management is a key business process that frequently goes without a dedicated process owner. Lack of dedicated ownership results in the sub-optimization of the strategy management process and progress on the OPM journey. Successful organizations assign a designated process owner or implement a team, such as the Office of Strategy Management, to lead the strategy management process. In this role, the process owner must have a direct line to, and trusting working relationship with, the chief executive. This allows the strategy management process owner and the chief executive to form a powerful team that is able to move the OPM agenda forward quickly and effectively. 

 

Focus on making strategy the way we work

A key to ensuring strategy execution success is building strategy into as many business processes as possible. Typical opportunities include the budgeting, reward and recognition, communication, compensation, and people performance management processes. Successful organizations know that building strategy into as many business processes as possible makes it more visible to their organization and enables higher levels of organizational alignment (which is critical to ensuring the achievement of their organizational strategy).

 

The most critical point here though is that, to maximize the returns on your OPM investment, every critical success factor on this list MUST be in place – if even one is missing or if any of these factors aren’t firing on all cylinders, the result will be sub-optimized OPM results. Unfortunately, this fact rarely gets discussed with/by executives before they jump on the OPM band-wagon and that’s too bad because a lack of understanding of what they and the organization really have to do to achieve success is the #1 reason, in my experience, why business leaders end up disappointed with the results achieved through OPM.

 

If your organization is considering starting on an OPM journey OR if your OPM journey is currently producing under-whelming results, I’d encourage you to review the list above and then answer these questions:

 

What aren’t you prepared to commit to/haven’t you committed to?

 

What items have you missed? Why?

 

What is your organization prepared to actually do to close these gaps? Why or why not? (What’s getting in the way of making the required commitment?)

 

In my experience, your answers to these questions will have a direct bearing on the business success you can realistically achieve through your organization's OPM efforts. 

 

Leaning Into Risk

Doing business is risky – particularly these days.

When my colleagues and I are out talking with executives and business leaders, we are increasingly finding that this group seems to be more concerned than usual about the topic of risk. More specifically, they are seeking more information about both the existing and emerging business risks they should be considering as a part of doing business; they want to understand the regulatory requirements for risk management and mitigation; and, if possible, they are looking for guidance on the best strategies for minimizing or, ideally, eliminating business risk.

Interestingly, we are seeing more and more CEO’s participating in the Board Director certification programs offered by the various business schools. Many of us speculate that this participation is driven by the executives’ thirst for knowledge about the nature of business risk and the current compliance requirements from the point of view of the Board Directors they will be dealing with. I wonder though if this uptick in interest and activity is actually more fundamental than that.

In an era of ongoing disruption and uncertainty in the external business environment, I think that executives and business leaders are looking for a source of sound information about, and effective strategies for, responding to and managing emerging business risks. What executives are looking for is help leading and growing their business in a dynamic, ever-changing operating environment.

 

What I really think is that executives need a different approach to business (and risk) management with new rules of engagement.

 

First, let’s look back into the not so distant past to understand where executives are coming from. In the “old days”, the external environment didn’t change that much and when it did change, the changes didn’t come at you quite so quickly and furiously. While many companies participated in industries and markets where change could be characterized as an evolution (long and slow over time) rather than a big bang, some did face a more dynamic market. However, even in those industries, the 3 – 5 year plan was still reasonable because the rate of change wasn’t that fast. So the rate of change executives had to deal with was manageable AND, importantly, the changes were more predictable. The business environment (including customer and competitor behavior) was easier to read and had some predictability to it. In addition, the economic situation just seemed a bit more stable. Essentially, business leaders had a pretty good handle on how their world worked and what the possibilities for change were.

In this type of environment, scenario planning was king. Because it was fairly easy to predict the potential changes in the business environment, analysts were able to create all types of future business scenarios and the potential responsive actions all mapped out with the associated financials laid out for business executives to consider and choose from. Managing change became kind of easy. When a change happened, all business leaders had to do was identify the scenario, consult the scenario plan options book, select the best response with the best financial outcomes, and implement.

The result of this situation was that organizations didn’t need to develop their capability and capacity to read and respond to a changing business environment. Because change didn’t happen that often and it was generally predictable, it didn’t take a lot of resources to deal with change. Not many people in the organization needed to have the skills to identify and respond to change. And the skills required to respond effectively to change were very specific – more related to having a deep understanding of the market and excelling at analyzing options based on a predictable model.

 

Now, fast forward to today’s business environment - it’s volatile and dynamic. Things change at a lightening fast pace in unpredictable and often breathtaking ways. Your customers' expectations constantly change and there’s a new competitor ready to respond. No one plays by the “rules” anymore. Heck – the rules have gone out the window and everyone seems to make new rules up as they go along. Economic decisions in one part of the globe can impact business operations in your world. A business decision made by one person in some company you’ve never have heard of or had dealings with can cripple or take out your company before you know it – and you didn’t even see it coming. When the “experts” can’t even predict what’s going to happen in the external environment next week, the old way of dealing with change, and the associated business risks, isn’t effective any more.

In fact, it’s a useless waste of time and mind capital to approach things in the old way with old tools and approaches. More importantly, the majority of companies have been caught flat footed with skills and capabilities that don’t help much in the current “new normal”.

 

In the face of these new pressures, many companies have responded by getting defensive in their approach to managing change and risk. Many are trying to eliminate the risks that they can through controls and other mandated risk management approaches. They are studying past experiences and are using that information to determine, understand, and respond to the “standard” risks in their environment. The only problem is that looking at the past doesn’t help you predict and deal with the unknown, non-standard event that is lurking in the near future. Taking a reactive approach like this is also a problem. However, choosing to be defensive in your response to business risk is the biggest problem in my mind. This is because it’s very difficult to grow your business when your focus is on being defensive against the potential risks that exist out there.

 

The better approach, that is more compatible with business growth, is accepting and leaning into change and the perceived associated risks.  

What I mean by this is that companies need to build the capacity and capability to: (1) pro-actively identify changes occurring in the local, national, and global operating environment, (2) assess the relevance and potential impact of those changes on the business and opportunities for business growth, (3) generate creative solutions/responses and make quick decisions about what to do next, (4) implement and re-align the organization and business activities and priorities quickly, and (5) get ready to change again almost immediately.

Operating in this way requires a different skill set that is distributed more broadly across the organization than ever before; new processes for surveying the environment and engaging people in the required analytical, solution creation, and decision-making conversations; and mechanisms for collecting external AND internal information and insights proactively and sharing new/changed business directions across and up and down the organization quickly and efficiently.

Some of the new organizational skills required for this new approach to change and risk include flexibility and adaptiveness, openness and curiosity about the marketplace (and the business environment in general), the ability to assess the impact of trends in the environment against business imperatives (and determine whether expected changes are even important in that context), and creative thinking and solution generation. Skills in effective communication, dialogue, and conversation are also important for successfully leaning into risk.

 

Most importantly, leaning into risk requires a completely different organizational mindset and culture. One where openness, flexibility, creative thinking, pro-activity/pro-active action, agility, a level of comfort with change and ambiguity, smart risk taking, experimentation, and sharing and collaboration are fundamental values. It also requires an operating environment that is built on high levels of trust and security, and supports employees in living these values and exercising new skills and capabilities every day.

So, while successfully leaning into risk requires the implementation of new processes and infrastructure, and the development of new and broader employee skills and capabilities, these investments will not translate into success unless you also transform your company’s mindset and culture. Quite simply, the classic command and control style of doing business and approaching change and business risk is not conducive to adopting a “leaning into risk” approach.

 

Your business environment is changing and the associated changes can result in higher levels of risk. The old approach to managing change and business risk just doesn’t work any more. In fact, maintaining approaches that may have been successful in the past carries an unacceptable level of risk - most business leaders recognize this. The dilemma is what are the alternatives? While taking a defensive position, that seeks to control risk, is one alternative, the impact on your company’s prospects for business growth will probably be too limiting.

I believe that the better approach is to accept that the business environment is volatile and unpredictable and then lean into the perceived risk as an organization by transforming into an organization that takes a pro-active and agile approach to identifying, sizing up, and responding to changes that could have meaning for business success and growth moving forward.

 

Leaning into risk is THE smart approach to moving forward in the “new normal” business environment but it isn’t just a cosmetic change – you’ve got to change from the foundation up. If you are willing to accept this challenge, I encourage you to begin making the change today – the future success of your business is probably depending on it.      

 

Keeping the Strategy Conversation Going - Business Performance and Strategy Execution Results Review Meetings

Initial strategy conversations take place in your organization when you share and explore your company’s strategy story with your employees. It is important to keep the strategy conversations going within your organization - the review of business performance results, and the assessment of strategic impact, provides you with the perfect opportunity to do just that.

Business performance measurement data, or your balanced scorecard, provide you with a wealth of information in this regard, however, data alone doesn’t tell you the complete story you need to properly answer the important question “Is our company executing our strategy as planned and is it having the impact we expect?”

 

You really need another layer of information to fully answer this question and this additional content comes from your people.

 

While this added intelligence is initially provided by the root cause analysis and commentary information that accompanies the business performance results presented in your balanced scorecard, this is just a starting point. Richer insights; innovative ideas and go forward action plan options; and decisions about changes in strategic direction can only come from the conversations your business performance results stimulate. Cross-functional discussion and exchange amongst your employees that is focused on the success and impact of your strategy execution investments, and the relevance of your strategy in a changing business environment, is where the ultimate value is for your organization. This is precisely why strategy-focused organizational conversation shouldn’t be an option for your company. The fact is that organizational conversations are essential if you wish to achieve your goals for profitable business growth in the most effective and efficient way.

While strategy conversations can, and should, take place across your organization anywhere, anytime, between anyone in your company, you need to create formal venues where you can orchestrate these discussions.

 

One such opportunity is in regular business performance/balanced scorecard results review meetings. The primary objective of this meeting is to review the “health” of the strategic objectives on your strategy map. This objective enables a discussion of whether your company is executing your customer and business strategy as planned and whether your strategy is truly moving your company forward. Four questions are usually asked and answered in business performance/balanced scorecard meetings:

(1) How are our BSC indicators and strategic initiatives performing versus targets?;

(2) What are our results telling us about the health of our strategic objectives/our customer and business strategy?;

(3) What is our root cause analysis telling us about our critical business issues?; and

(4) What corrective actions are planned, what resources do they require, what impact to we hope they will have by when, and what business risks, or unforeseen business/operational impacts, are associated with our planned actions?

And while there are other questions that you could consider during these meetings, these are the ones you absolutely must cover during your conversations.

 

Not surprisingly, the way you run these meetings is as important as what gets covered. Your goal is to get a healthy, fulsome, no topic off the table type of discussion going that features a healthy exchange of insights and perspectives on what’s going on in your business. In my experience, the best business performance/balanced scorecard meetings happen when they are run as “open meetings” where anyone in the organization can attend and employees with ownership for strategic objective health and business performance results take a hands-on role in leading the conversations.

Running open meetings signals that everyone in your company has a role to play in the successful execution of your customer and business strategy. Open 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 but it just takes creative solutions to get past these hurdles. One example is taking meetings and discussions about business performance results and strategy execution right to the shop floor. Always think: what creative solutions can we employ to make our business performance/balanced scorecard meetings accessible to everyone in your company?     

 

Another important formal venue for organizational conversation occurs during strategy execution progress reviews. Usually held on a quarterly basis, the objective of these meetings is to assess how your strategy is doing and whether anything needs to change. Five important questions should be asked and answered through these reviews:

(1) How have our strategic objectives been performing over the past quarter and what are the implications for strategy execution? (Are we moving forward?);

(2) What are our key strategic issues and what must we do to deal with them?;

(3) Have we got our business model right (is it driving the results we expect it to) or do we need to make changes?;

(4) What, if anything, is changing with our customers, with our competitors, and/or in our market and external operating environment and what impact could/should it have on our customer and business strategy?; and

(5) Is our customer and business strategy having the impact we expect/want or does something need to change?

 

Again, the how of this meeting matters as much as the what. The goal of all strategy execution progress review meetings is to explore the five questions through spirited conversation, discussion, and the honest and open exchange of perceptions, fact-based insights, and ideas. Needless to say, these meetings require the involvement of senior leadership team members, however, you can achieve an even higher quality meeting by driving for openness. For example, why not include the next layer of business leaders as attendees? What about subject matter experts? Business partners? External experts? Your customers? Feeling uneasy with these suggestions? Well, if it makes you feel better, don’t invite everyone to all parts of the meeting.  Just be sure to push the openness barrier where it makes sense.

 

Always remember - having more people in on the strategy conversation on an ongoing basis always produces better results for your company.

Why? Quite simply because organizational conversation is the “grease” that always makes the strategy execution feedback loop turn faster, accelerating your strategy execution success and enabling a more efficient and sustainable cycle of constant improvement in the customer and financial outcomes achieved by your company.  

 

This is an excerpt from my forthcoming book Business Results Revolution: 3 Critical Questions and the Conversations That Transform Business Performance Every Day   Like what you’ve read? Please let me know. To add your name to the pre-order list for my book, just make your request via the comments section below or email me at [email protected].

 

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.