Aligned teams simply execute better. Why do organizations get out of synch and how do we keep our people aligned with our strategy?
I lit up LinkedIn several years ago when I posted:
You know your organization is aligned when the CEO can ask any employee, “what are you doing today to support our strategy?” and get a crisp, accurate answer.
On the flip side of that, Bain Consulting once reported that 95% of employees in large companies did not know what the company strategy was. Harvard Business Review wrote, not long ago, that on average, companies deliver only 63% of the financial results that their strategy promises.
Think about those two statistics as one powerful statement. When employees don’t understand the strategy, the company underperforms.
When I facilitate corporate strategy, I focus heavily on employee alignment with the strategy. And our clients tend to see breakthrough results.
Aligned organizations execute better. Period.
So how do we align our people around our strategy?
We Perform to What We Are Measured On
I believe that most people come to work looking to support the company’s mission and strategy. Few get up in the morning and say, “I think I’ll do a lousy job today.” Yet so many people don’t realize that their efforts may be contrary to the company strategy. Why is that?
If we don’t know what’s going on, we make up our own story based on our observations. When employees don’t understand the company strategy, they must make up their own story and work toward it.
I’ve written numerous times about how we marry strategy and execution through the art of strategy management. Wolff Strategy Partners has applied and continuously refined our eight-step strategy management process for more than two decades. In it, we start with mission, vision, values, ideal client profile, and market differentiators. We then specify strategic objectives to delight our customers and drive the desired financial results. Next, we translate these objectives into measurable goals. See previous articles in this series.
The alignment magic happens in the next few steps.
Step 1 – Take a cross section of employees from across the company at all organizational levels to define the action plans, or projects, that we can execute to deliver on the stated goals.
Step 2 – The employees that participate in these sessions talk to their peers who realize that management is actually listening to the staff. Even though these peers are not directly involved they are more apt to pay attention and engage when the action plans are rolled out.
Step 3 – Once the action plans are approved, we assign people to projects.
Step 4 – Cascade performance objectives from the top of the organization and down to every employee. I’ll explain this just a little further.
By definition, the strategic plan is the performance objective for the CEO. But the CEO is not personally engaged in every action plan or project. There are, perhaps, vice presidents, directors, and managers that lead the people that execute the actions. So, the CEO’s performance objectives (the strategy) is divided among the vice presidents. And they divide their performance objectives among the directors who cascade to the managers. Finally, the managers cascade their objectives to the staff that are working on individual projects.
Now what happens when the CEO walks up to a senior customer service agent and asks what she is doing to support the strategy? That agent is likely to reply that she is part of the initiative to ensure that the resolution to every escalated incident is taught to the tier one agents, so that that issue never gets escalated again and our customers are delighted with our service.
Wow, that’s a far cry from 95% of employees not even knowing what the strategy is!
And since the agent has personal performance objectives tied to that project and its associated metrics, she is likely to focus on her goals and achieve them.
And when each employee has performance objectives directly tied to the strategy, they perform similarly. That’s an aligned organization.
A data driven strategy translates high-level strategic objectives into measurable goals. These goals drive action plans that are defined by the employees, not just management. Personal performance objectives are then derived from the action plans. And the employees are then aligned with the strategy.
By the way, when I first ran corporate strategy, we tested alignment by having the CEO walk around and ask people the question shown above. And she always got a clear answer. That’s how we suddenly drove 23% year-over-year growth in a 20+ year old company.
We’ll continue this theme of the data aware strategy as we explore the following in coming weeks:
- Do our data assets reflect what is crucial to our strategy?
- How will we leverage our data to accurately predict future business outcomes?
As always, if you are working on your strategy already, or just don’t want to wait for the complete set of articles, email Emily Ford at Emily@WolffStrategy.com and she’ll be happy to set up a free 30-minute consultation with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management, Digital Transformation, IT Leadership, and Executive Coaching. Larry has served as CEO, COO, CIO, Chief Digital Officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.
Feature image by Ivan Smuk from 123rf.com. Cascade image by pushishdonhongsa from 123rf.com.
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