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

Your Company is in WHAT Business?!?

When Facebook founder/CEO Mark Zuckerberg testified last week in front of Congress, I nearly feel off my chair when I heard his answer to the question “Are you a media company or a technology company?” Now – realizing that the options offered in the question may have been too limiting PLUS the fact that Zuckerberg was likely advised to stick to answering the questions (not correcting them), I was still shocked at his reported response: “I like to think that we are a tech company”.

Given the reason why Zuckerberg was called up to Congress in the first place (the Cambridge Analytica situation), it appears that someone (many someones?) at Facebook had the impression that the social networking platform is actually a data company. And, as a result, those folks made the business decision to monetize the data Facebook has invested in accumulating (a strategic move aligned with being in the data business).

Did someone forget to let Zuckerberg know that Facebook’s business has morphed over time from just a place for people to connect to a serious data company? (hint: I think he knows).

My goal here isn’t to get into a debate about what business Facebook is actually in. It’s really to point out that this kind of disconnect happens in companies of all sizes every day.

When people in a company (including executives) aren’t on the same page about what business the company is in, they make business decisions based on what business they think the company is in. And, when several decision-makers make different/conflicting guesses, business leaders and their company can be heading for a heap of trouble.

So what should you, as the leader of your company, do to head off the “what business are we in?” disconnect in your organization?

 

1 Decide what business your company is REALLY in and keep it up to date over time

There are lots of different factors that play into the decision about what business a company is in: the problem it’s solving; who the target customer is and what they need/expect from a provider; what others in the marketplace are doing to solve the problem and how the company plans to set itself apart; the customer value proposition the company is primarily focused on delivering, etc. I could go on.

To illustrate, let’s look at a hotel. Here are just some of the different businesses a hotel could be in:

1. Putting a roof over peoples’ heads at the lowest possible price
2. Providing a place to interact with/test out all the coolest tech amenities
3. Being a home away from home
4. Designing a luxury experience that anticipates and fulfills every wish
5. Supporting the ability to travel with the smallest possible carbon footprint

It really doesn’t matter which you select for your hotel – the important thing is to be clear about what business your hotel is in because that choice will have implications for all the business decisions, big and small, that follow.

Remember – your choice of what business you are in probably won’t stay static over time. Your customers change. The marketplace changes. Your company grows. And you learn. So, if you want to be in business tomorrow, you’ll have to be flexible and adaptable to change. And this can include tweaking or changing the business your company is in (companies re-position and rebrand all the time).

However, the important thing in step 1 is to be purposeful about, and clear on, what business your company is in at this point in time.  

 

2 Make sure that everyone is on the same page

Once you’ve settled on what business your company is in, and can state it clearly, it’s time to ensure that everyone in your company has the same understanding. Even when you think that the business that you’re in should be obvious to everyone, don’t take it for granted. Take my advice - don’t skip this step!

First be sure that everyone on the executive team is on the same page. Then begin communicating across your company. But don’t just use a one-way communication approach – be sure that part of your communication strategy includes having employees tell you what business your company is in and what that would look like in action. Taking the time to be sure that everyone has heard the same message and is indeed on the same page about what business your company is in will help prevent disconnects in the future.

Be sure to repeat this step with all new hires, from time to time with existing employees, and every time there’s an adjustment to what business your company is in.

 

3 Monitor the alignment between intent and follow through

Once you’ve clarified what business your company is in, and you’re sure that everyone is on the same page, you can’t stop there. It’s not a once and done proposition! You’ve got to keep everyone’s eyes on the follow through, making sure that business decisions, investments, actions, and priorities across your company stay aligned with the nature of the business you are in. Staying on top of the follow through across your company allows you and your team to pick up mis-alignments with your business intent early and make the required course corrections quickly.

The actions you and your team take to course correct will depend on the root cause behind the mis-alignment - the key is to learn and adjust before small mis-alignments snowball into a serious business problem.  

 

Disconnects between what business your company is in and the business your employees think your company is in happen all the time. Unfortunately, this disconnect almost always shows up as costly, misaligned business decisions and sub-optimized business results.

The good news is that, when you follow these three small but important steps, it’s possible to minimize, and even eliminate, the “what business are we in?” disconnect in your company - making it possible for everyone across your company to focus with certainty on doing the right things to maximize company performance, customer outcomes, and financial results for your business!

 

What Drives Strategy Mastery?

In my last blog post I introduced the most essential ingredient for strategy execution success: Strategy Mastery^TM.   Here’s a quick reminder of what Strategy Mastery^TM is and what it looks like in action:

Strategy Mastery^TM

Every employee in your organization must be a Strategy Master. That is, they need to know what your strategy story is and they must be confident in (1) that knowledge (i.e. that they have the strategy story right) and (2) their contribution to the strategy. Strategy Mastery^TM is important because it drives self-motivated engagement and confident employee action, decision-making, and contribution to strategy improvement, greater organizational alignment, and more integrated business performance. All of which are essential for strategy execution success.

 

Creating employees who are Strategy Masters requires significant organizational investment. Organizations that succeed create the right environment and culture and put the right supports in place to develop and nurture a cadre of Strategy Masters across their company.

Let’s take a closer look at how these elements work to enable Strategy Mastery^TM.  

 

 

Strategy Mastery^TM  is built on a foundation that successfully combines three critical components: (1) a Learning Culture, (2) a “Doing” Environment, and (3) Coaching and Mentorship.

1 A Learning Culture: Akey core value of every organization that is successful in creating Strategy Masters is learning. A focus on learning enables an organization and its employees to take necessary action and risks, and to use knowledge to navigate more dynamically and successfully through these turbulent times. Enabling the value of learning is a commitment to openness and transparency across the entire organization. These important co-requisites open the door for learning by setting the stage for the safe two-way exchange of knowledge, insights, and best practices. When leveraged in a “doing” environment, learning accelerates the pace of strategy execution and results achievement for an organization.   

2 A “Doing” Environment: Strategy Mastery^TM requires a work environment that displays a bias for deliberate action. However, this doesn’t mean that thinking goes out the window. What it does mean is that thinking progresses rapidly to decisions which are followed by action. A “doing” environment is also pro-active in nature, taking action on what it takes to move the strategy, and the organization, forward as planned.

However, setting an expectation for an action orientation across an organization isn’t enough – it’s got to be backed up by organizational commitment to providing customized and appropriate support to individual employees AND a dedication on the part of leadership to providing the learning opportunities and feedback employees need to fine-tune and/or re-focus their actions and efforts (individually and as part of the organization).  

3 Coaching and Mentorship: Developing employees into Strategy Masters must be tackled both at the organizational level and by Managers and Supervisors working one on one with employees. Set in a culture that values a collaborative leadership approach that’s focused on engaging employees in the co-development and execution of organizational strategy, Managers spend time sharing the vision for Strategy Mastery^TM with employees and providing them with opportunities to practice Strategy Mastery^TM every day. By acting as coaches and mentors to their employees, Managers and Supervisors help all employees develop into Strategy Masters through a “learn by doing” approach. Taking this approach also allows everyone to benefit from the insights employees generate and share as they practice the craft of Strategy Mastery^TM.     

 

With this foundation in place, an organization has the positive environment in place that’s required to enable employees to translate knowledge of the organization’s strategy into action. However, this transformation doesn’t happen by magic – it requires two critical elements: (1) accurate and useable strategic knowledge, and (2) the development of the individual skills and capabilities required to take that knowledge and put it into action.

1 Knowledge Transfer and Translation: Once an organization’s high level strategy has been transformed into Functional Strategy, it’s time to take the next step: doing whatever it takes to make sure that the organization’s strategy is alive and active in the hearts and minds of every employee. This is often done through strategy communication town halls and other communication venues that usually share strategy from the organizational perspective. While this is a necessary first step, organizations seeking to create Strategy Masters must go further. Managers and Supervisors must repeat the strategy story and then engage employees in discovering and understanding the following:

● What our strategy is, what it looks like in action, and my part in it.

● How our team, and me as an individual, contribute to it every day.

● How I think I can contribute (expressed in my own words) and, as I understand our strategy better and practice working with it, how I KNOW I can contribute.

As employees talk about and develop a clear line of sight on these important topics, knowledge transfer and translation is taking place across the organization. Progress is made when employees understand organizational strategy AND can see themselves putting it into action in a meaningful way.

2 Individual Skills and Capabilities Building: While seeing oneself putting strategy into action is a necessary step in the journey to Strategy Mastery^TM, there’s often an execution gap. While employees are willing they may not be able. It’s not that they don’t want to take action, it’s that they may need new or more highly developed skills to do it. As a result, an important part of successfully translating knowledge of the organization’s strategy into action involves helping individual employees build the skills, capabilities, and confidence they need to make their contribution AND achieve their personal potential. It turns out that having many opportunities to apply and practice putting knowledge into action goes a long way to building employees’ confidence in their knowledge and abilities. Knowledge confidence stokes more confident action and decision-making – a key attribute of Strategy Mastery^TM that ultimately accelerates strategy execution success.

The good news is that traditional training programs aren’t the only way to achieve this goal. Coaching, mentoring, job shadowing, special project assignments, and job rotations are all excellent ways to help employees acquire the skills and capabilities they want and need.

 

When individual employees are able to effectively translate knowledge of their organization’s strategy into action they are well on the road to becoming Strategy Masters. However, there’s one additional ingredient that’s required to make the leap to Strategy Mastery^TM status: Individualization and Internalization. Composed of two elements (1) individual motivation – organizational motivation alignment and (2) strategy ownership and intrinsic accountability, individualization and internalization deepens an employee’s understanding of, and impact on, the organization’s strategy execution efforts, and the strategy itself.

1 Individual Motivation – Organizational Motivation Alignment: Quite simply, the greater the alignment between an individual’s beliefs, values, purpose, goals, and motivations and those of the organization, the greater the degree of synergy. Why this focus on synergy? Synergy is the key to creating employee investment in an organization. And employee investment that’s deep and personal is the critical ingredient in achieving Strategy Mastery^TM (and its benefits). 

To maximize synergy, organizations should pay attention to the employee-organization fit during the hiring process. “Hiring for fit” involves assessing the resonance between an individual’s beliefs, etc. and those of the organization. Hiring people who fit makes synergy a more natural outcome. However, the opportunities don’t stop there. The investments organizations make in the ongoing development of employees is important and the greater the degree of alignment between the development of the job skills and capabilities required to serve company needs and objectives, and the personal goals and objectives of individual employees, the deeper the synergy that’s created.

2 Strategy Ownership and Intrinsic Accountability: This is the final link between putting knowledge of the strategy into action and achieving Strategy Mastery^TM. Strategy ownership, and the development of intrinsic motivation and accountability for successful strategy execution, occurs when employees see themselves as co-owners of the organization’s strategy, experiencing a state of personal ownership for, and investment in, the achievement of the organization’s mission. When strategy ownership is truly felt, employees take personal, internally driven accountability for doing their part in, and discovering new ways of, putting organizational strategy into action.

When employees are invested this deeply, the organization’s success and their personal success are virtually one in the same, making every employee’s commitment to ensuring successful strategy execution personal and driven genuinely from the inside.

While it’s true that employees can be motivated extrinsically with rewards to translate knowledge of the organization’s strategy into action, the level of strategy execution success an organization achieves will be sub-optimal (AND it will take a lot of effort to achieve this result). In contrast, by just stretching a little further to nurture Strategy Mastery^TM  in every employee, organizations can harness the creativity and drive of everyone to achieve greater levels of strategy execution success than they ever could have envisioned.

 

Going back to thinking about the strategy execution model presented in my last blog post, here’s a picture that shows how the other elements in the model enable Strategy Mastery^TM to drive strategy execution success:

 

While much of what goes into producing Strategy Mastery^TM  isn’t “rocket science” it’s important to lay out all of the contributing drivers in one view and discuss how they work together to produce the organizational element that is most critical to ensuring strategy execution success - Strategy Mastery^TM. Until you put all the drivers together on one page, it’s easy to forget that (1) they must all be in place, and (2) must work together cohesively if you hope to create an organization full of Strategy Masters.

The biggest barriers in the journey to Strategy Mastery^TM success include the fact that it takes: a cross-functional view of organizational activities, a commitment to work together in all corners of the organization, and an investment in supporting the elements that produce Strategy Mastery^TM results.

There’s a lot to do and most organizations struggle to get all of the required drivers in place working just right.

 

So where should you and your organization start on this journey to strategy execution success through Strategy Mastery^TM? In my next blog post I’ll offer you a prioritized roadmap for putting this plan for strategy execution success to work in your organization.

 

Strategy Ambassadors: The Key to Eliminating Strategy Execution Failure

Employee engagement and strategy execution failure – two stubborn challenges that countless organizations face but may not see as being connected. Big mistake.

Here’s something I’ve learned - there IS a connection and employee engagement and commitment is the secret sauce behind successful strategy execution. Let’s review the evidence.

 

I probably don’t need tell you that employee engagement levels continue to run at all-time lows. Recent statistics from the Canada Human Resources Centre reveal something shocking – 60% of employees are not engaged with another 15% classified as actively disengaged! The impact of employee disengagement is a bottom line issue. For example, statistics show that unhappy workers cost the North American business economy well over $350 billion annually in lost productivity! However, the impact goes deeper.

 

A review of the recent literature on strategy execution sub-optimization and failure rates shows that it persists in the range of 75% to 95%! This means that the vast majority of organizations are having trouble putting their business strategy into action, producing sub-optimized financial results, stakeholder outcomes, and impact.  

Many people tell me that they just can’t believe that strategy execution failure hasn’t improved over the past 25+ years. That the implementation of professional strategy management disciplines and tools such as Management by Objectives, the Balanced Scorecard, and, more recently, OKR’s, hasn’t made a significant dent in these results is unbelievable to many.

 

Why is this the case? Why hasn’t the proliferation of strategy management approaches turned the strategy execution failure statistics around? Based on my reading, experience, and observations, here’s what I think -

 

From the post-war era until the present time we have experienced a general upswing in both the introduction and use of recognized business/strategy management disciplines and tools in a range of organizations. However, over the same period, employee engagement levels have generally been tracking downward. While there may have been a non-linear progression, I believe that there has been an overall downward trend for some time. At some point in history these trend lines crossed (probably in the past 25 years) and the strategy execution failure rate hasn’t budged since then.

Of course, one wild card in all this has been the change in the nature of the marketplace – it has gone from local to global. While we can’t discount the pressures this has put on business success rates, I’m not convinced that we can blame strategy execution failure rates on globalization.

 

What I do believe is that strategy execution success requires BOTH the implementation of sound strategy management discipline and tools AND high levels of employee engagement. And I suspect that employee engagement levels are actually the more important element of the two.

 

So what if there was a simple solution that any organization could implement that would have an impact on both elements of this equation AND produce significant improvements in that organization’s strategy execution success rate?

 

That solution is Strategy Ambassadors.

 

Strategy Ambassadors are people from within your organization who understand your business strategy and are passionate about engaging their peers with it. This includes helping everyone: understand your strategy and see their role in putting it into action; become committed to taking an active and enthusiastic role in implementing your strategy in their department/team; and partner with leadership to improve the strategy and the results it achieves.

Strategy Ambassadors can be people from any level of your organization – managers and non-managers alike. They just need the training and empowerment necessary to communicate and discuss your organization’s strategy story with others and help your people make your strategy their own at the “local” level.

 

Leveraging Strategy Ambassadors within an organization helps strengthen the elements you need for strategy execution success in the following ways:

Strategy Ambassadors enable the implementation of strategy management discipline across your organization: A lack of employee understanding of your strategy is the first barrier to strategy execution success - Strategy Ambassadors assist with clearing away this impediment by communicating your strategy across your organization and helping employees understand it in a way that has personal meaning to them. Lack of organizational alignment is another barrier to successful strategy execution. Strategy Ambassadors help employees align their day to day work efforts with your strategic priorities. They do this by engaging employees in an active process of discussion, discovery, and commitment to aligned action. The final driver of strategy execution success is making strategy everyone’s job. By engaging employees in an ongoing two-way dialogue about strategy implementation, results, and improvement, Strategy Ambassadors help employees interact with your strategy in a high value way as part of their everyday contribution. Leveraging Strategy Ambassadors is an efficient and effective way for your organization to put elements that are critical for strategy execution success in place.

 

Strategy Ambassadors have a positive impact on employee engagement levels: A critical precursor for high levels of employee engagement is employee trust. A clear and believable organizational strategy paired with the strong, transparent, and consistent two-way communication of that strategy goes a long way to building high levels of trust with employees. This lays the groundwork for employee engagement, however, implementing the infrastructure required to enable employee interaction with, and collaboration on, your strategy is a necessary ingredient in making employee engagement a reality. Strategy Ambassadors play a critical role in building employee trust levels on the ground and they are a pivotal part of the infrastructure that enables all employees to have a role and voice in your strategy.

 

While Strategy Ambassadors can have a critical impact on improving the chances of strategy execution success for your organization, I would be remiss if I didn’t mention the importance of leadership in this equation. In fact, visionary and collaborative leadership is an important critical success factor. Strong and committed leadership (1) creates a culture and environment that’s conducive for employee engagement and strategy execution success, and (2) empowers Strategy Ambassadors to take ownership for their role of inspiring employees to: internalize your organization’s strategy, invest in putting it into action, and make the achievement of desired results a personal mission that they can actually influence.

 

I have seen many organizations make Strategy Ambassadors a key part of their strategy execution success plan. The most successful organizations make this role the lynchpin of their success. In my experience, it’s the high levels of employee engagement this role enables that makes the difference and delivers the greatest impact.

Is your organization ready to experience the benefits achieved through Strategy Ambassadors? Start planning to introduce them today to see your employee engagement and strategy execution results soar!

 

Frustrated with your organization’s level of strategy execution success and want to explore implementing Strategy Ambassadors? Let’s talk about how you can do it including your next steps. Contact me through the comments section below or at [email protected]    

What is Collaborative Strategy?

 

If you'd like to explore the collaborative strategy approach in more detail, go to http://www.collaborativestrategy.ca/download-now/ and download my new ebook "Business Results Revolution for Healthcare Organizations" now.

 

Do You Know Who Your Number 1 Stakeholder Is?

An important step in defining your organization’s strategy is identifying all of your stakeholders. A stakeholder, in my mind, is anyone who can have a positive or negative impact on your organization’s ability to achieve its mission and vision. Stakeholders are important to organizations because they are usually the individuals or groups that the organization is ultimately accountable to.

So who counts as a stakeholder? Customers are a special group of stakeholders that get identified because of their role in the revenue generation value chain. Employees are another important stakeholder. In private sector organizations, the shareholder is considered a key stakeholder (particularly in the current age of activist shareholders). In public sector organizations, the funder(s) (i.e. the government/taxpayers, donors, etc.) are another class of stakeholder.

The key is to look both inside and outside your organization to create a list of individuals and/or groups that can help or hurt you in your drive to achieve your mission and vision.

Most organizations have a very long list of stakeholders and this long list can make responding to stakeholder needs very challenging indeed. One way to make a long list of stakeholders more manageable is to look for opportunities to group stakeholders with common needs and expectations together. Sometimes you might be surprised by which stakeholders can be grouped together based on this common ground.

That being said, not all lists of common needs and expectations are created equal. While stakeholder groups may have things in common, they may prioritize them differently. For example, employees and volunteers may both want a fulfilling learning experience but this need may be higher up on one group’s “must have” list than it is on the other’s list. When this is the case, it might be best to not lump stakeholders with common needs and expectations together. The key is to not force it. If it will be risky to lump multiple stakeholders/stakeholder groups together (i.e. thinking of these stakeholders as a homogeneous group will produce faulty business decisions) then don’t feel pressured to do it.

 

The goal is to get your stakeholder list down to as manageable number as you possibly can (fewer than 8 different stakeholder groups is what I often see).

 

However, I do want to say one word about the process for developing your stakeholder list. Be sure to assemble a group of employees with your senior leadership team and have them work together to create your stakeholder list. When you take this approach you’ll discover (if you are like most organizations I know) that there is a lack of consensus on who your organization’s stakeholders are. Working together to create a commonly understood and agreed to stakeholder list is the first step in creating a solid foundation for your strategic plan and in building the organizational alignment necessary to produce better, more consistent business decisions.

 

While getting your stakeholder list together is a great first step, don’t be tempted to stop there. Here’s why.

As I mentioned earlier, most organizations end up with a list of, on average, eight stakeholders. Some have more and some have less. Any way you look at it, trying to meet the needs and expectations of eight different stakeholder groups, that you acknowledge have different motivations and are making different (often competing) demands on your organization, can be an enormous challenge. But many organizations strive (and struggle) to do exactly this every day.

Unfortunately, despite their best intentions and a great deal of honest effort, organizations that try to meet the needs of all their stakeholders equally usually end of serving (and satisfying) none of their stakeholders in a way that delights.This is a problem.

It’s so much of a problem that savvy business leaders and employees will naturally (and often secretly) choose which of their stakeholders is the most important one to respond to. That is, they decide who their number 1 stakeholder/stakeholder group is. Who can blame them? It’s the only way to manage competing demands and to prioritize the work that goes into responding to stakeholder needs and expectations. From there, whether they realize it or not, business leaders will make important business decisions, including ones with real resource and funding implications, based on their idea of who they are there to serve (i.e. their number 1 stakeholder).

While this sounds great, what usually happens in organizations is that there is a lack of consensus on who the number 1 or primary stakeholder is. Imagine the chaos that could exist if, for example, every senior manager at the executive table has a different view of who the organization’s primary stakeholder is and were making big business decisions with their own particular view in mind? Sound unlikely? Think again.

Why not test it out for yourself in your organization? Ask the next three business leaders you meet who your number 1 stakeholder is and see whether their answers are the same (you are way ahead of most organizations if they are).

Once you’ve determined which of your many stakeholders is your primary stakeholder, and everyone in your organization is on the same page in this regard, everything in your organization changes – here’s how:

You can create a stakeholder value proposition/promise that is focused on delivering value to one stakeholder and not many (here’s a secret: if you exceed the expectations of your primary stakeholder, you’ll almost always make many of your other stakeholders very happy).

You can design a balanced business model that strives to meet the needs of multiple stakeholders but keeps these needs appropriately subordinate to those of your primary stakeholder.

Business leaders and employees have the same primary stakeholder in mind as they develop and deliver their work.

Business leaders and employees have a consistent filter/criteria for making prioritization, trade off, and investment (i.e. resourcing, spending, and work effort) decisions.

Your organization works together in a more integrated and efficient way to serve your stakeholders, deliver outcomes, and achieve your mission and vision.

 

Once again, the best way to determine who your primary stakeholder should be is to engage a cross-functional, cross-level team in a conversation that ends with consensus on who your number 1 stakeholder is. And though you likely won’t go out and tell your stakeholders where they rank on your list (no use in alienating anyone – they are all still important to your business success in the end!), having clarity across your organization is a big win.

It’s important to realize that achieving the benefits I outlined above isn’t as easy as deciding who your primary stakeholder is – there are implications associated with your selection that you need to work through and decide whether you and your organization can really live with the necessary tradeoffs. Only until you are comfortable with the implications of your decision should you declare who your number 1 stakeholder is.

Strategy Conversations (and what they can do for your public sector organization)

To download the pdf of this infographic, click on the link below.

Download STRATEGY CONVERSATIONS infograph (public sector)

Strategy Conversations (and what they can do for your private sector company)

To download the pdf of this infographic, click on the link below.

Download STRATEGY CONVERSATIONS inforgraph (private sector) v2

How to Create a Fun and Effective Employee Reward and Recognition Program That Really Works

An important step in the evolution of any organization is creating a vision of its future, determining where it is today, and then mapping out the path to get from here to there. Most organizations will come out of this process with a well thought out set of projects and activities it must execute to make the journey. However, the really successful organizations will also determine what the roadmap for behavioral change looks like.

For some organizations, this will involve putting a greater emphasis on existing behaviors by making them more pervasive across the organization. For others though, making the transition to the desired future state will require the organization to adopt an entirely new set of behaviors. No matter what the answer is for any particular organization, a successful journey from here to there requires a careful determination of how the organization must behave in the future.

 

Many factors go into encouraging and enabling employee behavior change in an organization. For example, having leaders model the desired behaviors plays an important role in this process. In my experience, clearly linking employee goal plans and performance evaluation to the desired behavioral elements is also critically important.

However, I have found that the element that is the most effective in supporting successful organizational behavioral change is a well designed employee reward and recognition program. While informally rewarding and recognizing employees for exhibiting desired behaviors is important, the key to real success is a formal employee reward and recognition program. Why? Because, when they are designed correctly, these formal programs ensure that (1) all employees gain an understanding of what the desired behaviors are and what they look like in action; (2) employees can engage in a meaningful way in enabling and modeling desired behaviors; and (3) employees’ efforts to demonstrate the behaviors that will move your organization in the right direction are regularly and consistently rewarded and publically recognized.

The good news is that the best formal employee reward and recognition programs aren’t administration heavy. In fact, by removing the bureaucracy from the design of the program, you create a vehicle that is more powerful in enabling real and sustainable organizational behavior change.

Here are four features that I have found to be essential when designing a truly effective employee reward and recognition program.

 

Clearly Define and Communicate the Behavioral Focus of Your Program  

What behaviors do you want employees to exhibit? The answer depends on the results of the “here to there” roadmapping for your organization. In my experience, most organizations choose to focus their reward and recognition program on encouraging employees to put the organization’s core values into action, however, as I mentioned earlier, your organization may need to build other/additional behaviors into employees’ repertoire. Either way, it is important that your reward and recognition program spells out exactly what the desired behaviors are including what they look like in action. This part is particularly important because knowing how to translate the desired behaviors into relevant, day to day actions is necessary for employees (1) to display those desired behaviors themselves; and (2) to recognize them when they see others displaying them.

 

Here’s an example of a program we implemented when I worked at a Canadian insurance company:

Known as “That’s Just Like Me”, our program was designed to allow any employee to reward and recognize anyone for displaying specific behaviors. While the program was designed to recognize behaviors associated with our core values, it was also focused on recognizing employees for delivering great customer service experiences. Every employee was provided with a small coupon book with four sections – each with different purposes. Here is a picture of the first section of the coupon book that reminds employees about the behaviors the program was focused on:

 

Give All Employees the Ability to Reward and Recognize Others

While giving all employees the ability to identify and bestow rewards and recognition significantly reduces the administrative burden of an organization-wide program, there are
more important reasons for building this design feature into your reward and recognition program.

First of all, to give out rewards, employees must internalize the behaviors and understand what they look like in action so that they can reward others (and receive rewards themselves). While you can tell employees what behaviors are desired by your organization, just hearing about them is a passive activity. However, building employee action into the design of your program makes executing the desired behaviors (that will actually make a difference in moving your organization closer to your vision state) the outcome of your program.

Allowing employees to bestow rewards for behavior has the added benefit of immediately recognizing the completion of desired behaviors with no administrative delay. Rewarding behaviors as they happen creates greater awareness and reinforcement for employees.

Most important, however, is the fact that giving employees the ability to reward and recognize others empowers them, making them active players in shaping their organization into the organization of the future. The outcome of this empowerment is greater employee investment in their organization.

 

In the “That’s Just Like Me” program, all employees at all levels of our organization received a bundle of coupon books. After a briefing on the desired organizational behaviors and how the program worked, employees were free to reward and recognize others as they saw fit. No questions – it was always up to our employees to decide who to give rewards to and why.    

 

Provide Tangible Personal Rewards to Individuals

A key part of a successful reward program involves providing employees with individual recognition for the behaviors they have personally displayed. Providing individual employees with a physical token as part of their reward serves at least two purposes: (1) it reminds the employee that they have successfully displayed the desired behaviors (and someone noticed); and (2) multiple tokens reinforces for the employee that they are displaying desired behaviors consistently and frequently. In addition, when the token is publically displayed, it lets others know that the employee is a model of the desired behaviors.

Physical tokens that work can include certificates that can be displayed in an employee’s workstation or on a public online profile, and articles like hats, ID tag lanyards, and buttons – all of which can be worn by the employee. The item(s) you choose to use as your employees’ personal token of recognition should make sense in relation to the nature of your program and is only limited by your creativity and budget.

 

In the “That’s Just Like Me” program, our physical tokens included an award certificate and a zipper pull – see photo below.

 

When every employee received their coupon book they also received an allotment of zipper pulls that were provided to the people they wished to recognize. The number of zipper pulls an employee could be awarded was unlimited and it wasn’t unusual for employees to have multiple certificates and zipper pulls.      

 

Share and Recognize Rewarded Employee Behavior Publically

The final critical design element for an effective reward and recognition program is sharing employee recognition publically. More specifically, it is important to ensure that others know what employees are doing (and be rewarded for) to put the desired behavior into action. Making desired behavior public in this way allows others to see examples of real-life employee activities that successfully display the desired behaviors, inspiring them to believe that they can do the same themselves. In the end, sharing successful employee actions publically provides other employees with peer models to follow, accelerating the speed at which the desired behaviors are adopted across your organization.

Ways to publically share employees’ behaviors and actions can vary but it’s key to ensure that a “behavioral footprint” is left behind for others to continuously look back on and reference. Be sure to capture a record of the behavior in a sustainable format (e.g. in writing, via a podcast or video, etc) and ensure that these footprints are easily accessed by employees on demand in a way that suits them.  

 

With the “That’s Just Like Me” program, a segment of the coupon book provided a place to document what an employee had done to receive their award – see photo below.

 

Once the coupon was filled out, it was displayed on a public board on the employee's floor – making the information accessible to everyone who visited the floor. In addition, at quarterly all employee town halls, examples of specific employee actions were mentioned and employees were publically congratulated for making a real difference for our customers and in living our organization's values.

 

A formal employee reward and recognition program plays an important role in helping your organization make its journey to your desired future state. In fact, a well designed reward and recognition program can accelerate the pace at which your organization adopts the behaviors required to achieve that future vision.

The good news is that the less administrative your program is, the better and more effective it will be. However, it is important to realize that your formal program does need support to be successful. In addition to the funding required to provide the physical tokens that are included in your program, it is important that executive and business leaders encourage and empower every employee to participate in the program and play an active role in shaping the type of organization your company becomes, and the kind of culture it creates, on its journey from today to tomorrow.

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. 

 

Data Is Just the Beginning of the Conversation

Most organizations I work with put significant effort into collecting their business performance/Balanced Scorecard results data and creating results reports. So much so that everyone (from data collectors and owners, to executives and strategic objective owners) is relieved when the process is done.

 

However, what if I told you that all that work your organization puts into collecting data and producing those reports is just the beginning of the high-value work and NOT the end? Would you be surprised?

 

What I mean by my statement is that, if you want to reap the REAL benefits of your organization’s strategy management efforts you’ve got to move from a focus on performance measurement (i.e. the scenario I described above) to a focus on performance management.

When your organization makes this important shift in its focus, data becomes the beginning of a high-value, strategy-focused conversation, rather than just the end of a necessary, but somewhat mechanical, process.

 

Many organizations hold results review meetings that look and feel like this: Executives and senior leaders approach the meetings with dread because they’re a boring regurgitation of the minutiae of an interminable number of performance results reports. Detailed performance results are reviewed by business unit silo, presenters take a “duck-and-cover” approach to discussing areas of underperformance, and vague, issue-specific improvement plans are offered when color-coded business performance demands it. Everyone is happy to leave these meetings so that they can get back to their “real work”.

 

I know that this sounds depressing and it is. However, this is exactly what happens in countless organizations. And it’s precisely what you get when you are focused on performance measurement, and when data and report production is the objective of your work.

 

In contrast, when your organization’s focus is on performance management, your objective is to use performance results to better understand your strategy, to assess its progress and identify key, cross-company strategic issues and risks, and to develop plans to keep your strategy moving on a forward trajectory. The only way to do this is to leverage data and performance results to explore your strategy and situation in a forum that enables honest sharing, information and knowledge exchange, learning, and collaboration.

 

When you do this, data acts as the catalyst for high-value conversations.

 

Making the transition from a focus on performance measurement to performance management requires a subtle but important shift in emphasis – from pure results reporting to analyzing results with an eye to discovering the implications for your organization’s business strategy and strategy execution capabilities. When this shift is successfully made, “results review meetings” take on a new flavor and have a new vibe – they become interesting, “must attend” events where the juices flow, important organizational connections are made, and exciting things happen.

 

Here are the keys to having this new kind of meeting in your organization.

 

First, ban results review discussions from your meetings – forever! This doesn’t mean that you’ll stop assembling business performance results data and producing preliminary analysis on results (remember – you need data to begin the conversation!). However, gone are the days when meetings are consumed by results data reviews. Begin with the expectation that relevant data and analysis will be reviewed by attendees prior to coming to your new strategy discussion meetings.

 

Set up your new meeting to focus on exploring a series of questions that leverage performance results data and its preliminary analysis:

● What help or advice would you like from the group to help you resolve a specific business issue or problem, improve performance, gain deeper insight into an issue and/or its drivers, etc.?

● How has our strategy (i.e. strategic objectives and priorities) been performing over the past quarter? Looking at the organization as a whole, what are our results telling us?

● What are the implications for strategy execution? Are we moving forward? What’s getting in our way?

● What are our key strategic issues and risks (and how should we respond)? Do we have any systemic (cross-organizational) issues and/or risks? What are the root causes and what must we do about them?

● Is there anything going on in our external environment we need to be aware of and what are the implications for our strategy/strategy execution plans?

● Is our strategy “working”? Why or why not? How do we know?

● What, if any, changes are required? What are they and by when? How will they help us move forward and how will we know that they have worked? What will be different, how, by when?

 

Now - who wouldn’t get excited by a meeting that allows you to dig into such meaty and meaningful questions and discussions?

 

This is exactly what making data the beginning of the conversation looks like in action!

 

Is your organization focused on performance measurement or performance management? Your response will determine whether you are sub-optimizing your strategy management efforts or engaging in high-value activities that deliver a significant ROI (i.e. strategy execution success and business performance results achievement).

How can you tell where the focus is in your organization? Just ask and answer this one simple question:

Is data the beginning of the conversation or just the end of a process in your company?

 

Your answer will tell you exactly what you need to do next to get the most out of your strategy management journey!