3/30/2012 10:14 AM
Since 2005, the Six Disciplines blog offers posts about performance excellence, strategy execution, business coaching, leadership development, innovation, and business process improvement. With more than 18,000 visitors monthly, this blog has received prestigious awards for leadership and management, and has been syndicated by several major media sources.
By Nate on
9/12/2014 7:57 AM
An organization that learns a systematic way of setting its priorities, that learns how to build detailed plans, that learns how to proactively manage those plans and communicate in an organized way is in a much better position.
In such an environment, goals are clearer and new employees can understand their role sooner. They learn how to communicate more effectively. Overall, the efficiency and effectiveness of the organization will be higher; it will have better capacity to respond to the demands of growth.
- Building an organization that can learn how to execute strategy and deal with the daily surprises of the business world is solving the one problem that makes solving all other problems easier.
- Solving this one problem yields substantial long-term benefits for your business, including predictability, balance, managed growth and substantially increased market value. All of this promotes a better night’s sleep for you.
- Solving this one problem also leads to the creation of an organization that is trusted both internally and externally. It enables an organization that learns how to develop its people to their fullest potential. It empowers an organization that can be successfully transitioned to the next generation, and so on.
- The value of your business will be significantly higher if it has a predictable strategy
- Any business that would adopt a systematic program for strategy execution two years before selling the business would get 30–40 percent more for the business when sold. Why? Because having an organization that knows how to plan and execute is rare. Those who achieve it set themselves apart and are worth more.
By Nate on
9/5/2014 9:04 AM
Harvard Business School Working Knowledge offers up this interview with HBS professor Robert S. Kaplan, one of the original creators of the Balanced Scorecard in 1992.
Key take-aways from their latest research:
- Companies often manage strategy in fits and starts.
- Though executives may formulate an excellent strategy, it easily fades from memory as the organization tackles day-to-day operations issues, or what most think of as "fighting fires."
- Strategy forumulation needs to be a continual process - not an annual event.
- Senior management teams needs to have regular, probably monthly, meetings that focus only on strategy.
- Companies need a formal process for using strategic objectives to set priorities for where operational improvements can have the largest impact on strategy execution.
- A complete strategy execution system schedules strategy review meetings at a different time from operational review meetings, so that each meeting has its own frequency, agenda, information system, and participation.
- Creating a strategy map and scorecard for that strategy is the logical and proven next step for putting the strategy into action.
Kaplan also reveals the "six strategy execution stages":
- Stage 1: The CEO leads the change agenda and drives it from the top to reinforce the mission, values and vision. Leadership sets the ambitious vision and stretch targets.
- Stage 2: The executive leader validates the strategy map as an expression of the strategy articulated in Stage 1 and challenges the organization with stretch targets that take all employees outside their comfort zones.
- Stage 3: Leadership drives alignment of organizational units and is essential for communicating vision, values, and strategy to all employees.
- Stage 4: Leadership supports the cross-organizational unit process improvements.
- Stage 5: the leader's openness and skill in running the strategy management review meeting determines its effectiveness for fine-tuning the strategy throughout the year.
- Stage 6: The leader must allow even a well-formulated and executed strategy to be challenged in light of new external circumstances, data collected about the performance of the existing strategy, and new suggestions from employees throughout the organization. Being willing to welcome and subject existing business strategies to fact-based challenges is one of the hallmarks of effective leadership.
By Nate on
8/29/2014 7:34 AM
With all the bad news bombarding us daily, it's time to get control over the things we can do, and do everything we can during times of uncertainty, to avoid the epic fail.
To wit, here's a short refresher on why companies fail:
Failure to understand the customer
• Why they buy, what they want (real need for the product/service)
Failure to understand the resources, time required to execute the strategy
• Can the staff, equipment, and processes handle the stated strategy?
• Failure to develop new employee and leadership skills
Failure to obtain senior leader commitment
• Failure to get management involved right from the start
• Failure to obtain sufficient company resources to accomplish task
Failure to obtain team member commitment
• The strategy is not well explained to employees
• No incentives given to workers to embrace the strategy
Failure to manage change
• Inadequate understanding of the internal resistance to change
• Lack of vision on the relationships between processes, technology and organization
Failure to focus
• Inability or unwillingness to make choices which are true to the strategic mission (i.e. to do fewer things, better), leads to mediocrity, inability to compete
Failure to execute the plan
• No follow-through after initial planning
• No tracking of progress against the plan
• No accountability / consequences for the above
BOTTOMLINE: Start today...resolve to focus and act on the things you DO have control over (internal issues), on the highest priority activities you can - you'll find they all revolve around executing your strategy.
By Nate on
8/22/2014 7:39 AM
W. Edwards Deming was a supreme practitioner of quality management.
He summarized his ideas in these Fourteen Points of Quality Management
- Create constancy of purpose towards improvement. That means short-term out, long-term in.
- Adopt the new philosophy. From top to bottom
- Cease dependence on inspection. You don’t inspect quality into products and services - you design it in.
- Move towards a single supplier for any one item. Playing many suppliers off against each other is wasteful.
- Improve constantly and forever. However good you are, you can always do better.
- Institute training on the job. The best place to learn.
- Institute leadership. Go well beyond supervision and its quotas and targets.
- Drive out fear. Makes for bad work - and bad management.
- Break down barriers between departments. No more “silos."
- Eliminate slogans. Non-meaningful slogans are counter-productive substitute for real management.
- Eliminate management by objectives. Relying on production and other targets is also counter-productive.
- Remove barriers to pride of workmanship. The key to superior quality lies here - and in the Fourteen Points, which all encourage performance.
- Institute education and self-improvement. Organizational learning.
- Transformation is everyone’s job. Everyone, from the bottom - and including the top.
BOTTOMLINE: Simple, straightforward, not easy, but absolutely worth the effort.
By Nate on
8/15/2014 7:33 AM
If you want to improve performance, or likewise increase capacity or capability, you need to track the one thing that you'll never get back: time.
In order to improve effectiveness and efficiency, you must understand how your time is being used. With all of the technological advances over the past two decades, we're continually forced to do things "better, faster, cheaper." In other words, all of these advances have taught us how to be more efficient
But - have any of these advances (spreadsheets, email, cell phones, IM, etc.) made us more effective
The difference between the two?
- Being efficient is essentially doing things right.
- Being effective is essentially doing the right things.
It's not enough to just do things right - we also need to balance it with doing the right things, doing the right things based on their priority.
As Dr. Stephen Covey once said: "The key is not to prioritize what's on your schedule, but to schedule your priorities.”
Take a good look at your calendar: Are you spending time on the most important things? Are you spending the appropriate amount of time on those activities that are the highest priority? How do you know?
If you're not tracking how you spend your time, how will you ever know?
The best way is to have an individual plan (we recommend quarterly) - of daily activities that you're responsible for, which support the organization's goals, initiatives and projects. Track your time against these projects daily, and review weekly. The goal is to spend the most time on the most important activities that get you closer to achieving the organization's goals..
Now, consider this: multiply this daily/weekly time-tracking activity times the number of people in your organization. You'll be amazed at how much more productivity and results you'll begin to see (or, very frustrated, by how much time is actually wasted on non-productive, non-essential activities...)
So.... if you're looking to improve your performance (or the performance of your organization) - how can you possibly improve, if you don't track your time
By Nate on
8/1/2014 7:44 AM
Tough times require tough decisions.
During times of economic uncertainty, strategy refinement and executionneed to become the top priority for business leaders.
How to start?
Begin by doing a SWOT Analysis. SWOT is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in your business.
The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving your strategy. SWOT analysis groups key pieces of information into two main categories:
Internal factors - The strengths and weaknesses internal to the organization. The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organizations objectives. The factors may include all of the 4Ps (product, price, place, promotion) as well as personnel, finance, manufacturing capabilities, and so on.
External factors - The opportunities and threats presented by the external environment. The external factors may include the economy, technological change, legislation, and socio-cultural changes, as well as changes in your marketplace or competitive position.
BOTTOMLINE: While it's important to regularly conduct a SWOT analysis on your business, it's critical to revisit SWOT during times of economic uncertainty. In particular, it's essential that you focus on the internal factors that you can control; not the external factors you can't control. By focusing on internal factors, you'll be better able to unearth new opportunities for innovation.
By Nate on
7/25/2014 7:37 AM
A SWOT analysis is a tool used to assess an organization's strengths, weaknesses, opportunities and threats.
The purpose of using the SWOT tool is to uncover or reveal the organization's competitive advantages, and what opportunities (sales, profitability) to capitalize upon.
It's also used to articulate the challenges an organization has, enabling contingency plans.
An analysis of the organization's strengths and weaknesses is typically an internal examination process. It's typically based on a review of internal and external facts and assumptions about the organization and the marketplace in which it operates.
Having trouble starting out your SWOT analysis?
Consider exploring these key categories:
Strengths and Weaknesses
Opportunities and Threats
- Marketing (company image, reputation, positioning, market share, growth)
- Products and Services (price, quality,
- Finances (stability, profitability, debt to equity ratio)
- Operations (facilities, capacity, distribution channels, supply chain, costs, use of technology)
- Organizational (leadership, accountability, commitment, engagement)
- Demographic (customer trends - age, lifestyle, education, buying patterns)
- Economic (economic growth rate, stability, inflation)
- Political / Legal (government stability, controls and regulations, effects of terrorism)
- Social (lifestyle trends, communications, ethnicity)
- Cultural (values, ethics)
- Environmental (sustainability, conservation)
- Technological (pace and changes in technology)
- Competition (industry leaders, number of competitors, fragmentation/consolidation)
By Nate on
7/11/2014 7:38 AM
In business, "if you can't measure it, you can't manage it."
When it comes to executing your business strategy, you must first translate the strategic plan into short-term operating objectives or metrics - and progress must be monitored and measured regularly.
To achieve strategic objectives, your organization must develop short-term measurable objectives that logically relate to the company's strategy, as well as a plan for how your organization plans to compete: how you will be different from your competition.
Unfortunately, this is where most strategic planning sessions end; in a 3-inch binder sitting on a dusty shelf.
What needs to occur next is translating your organization's strategy into actionable plans and initiatives, and perhaps most importantly, translate these plans into measurable gradecards or scorecards which are continually monitored.
Continual monitoring progress toward organizational goals (both short-term and long-term) helps to keep you focused on what's important, which is an integral and vital part of the execution process. The earlier that course corrections can be made, the better.
By Nate on
6/27/2014 7:05 AM
For better or worse, why do so many companies veer off their strategic plan?
Look for a disconnect between strategy and how resources are allocated, say Harvard Business School's Joseph L. Bower and Clark G. Gilbert, in their article "What Really Drives Strategy?"
"Organizations of any size are built around a series of building blocks, and the bigger the company the more responsibility in those building blocks. Today they are called SBUs—Strategic Business Units—or they are country organizations. If you add up what those people actually do, which ideas they choose to bring forward, and which of those get funded, the consequences of that activity is what adds up to the strategy of the company, not words on paper. And once you see that, you begin to ask questions such as: What determines which ideas get sponsored and funded? If I'm the top management, how can I shape that process, manage it, and give it direction?"
That's what their book, From Resource Allocation to Strategy, is about.
BOTTOMLINE: Interestingly enough, the "disconnect" between strategy and how resources are allocated, as identified in this HBR article, is precisely why it's critical to align your resources and systems. Since up to 90% of effectively formulated strategies fail due to execution, it's critcal to understand that it's after the goals are set that companies run into one of their greatest challenges - their own internal systems - processes, policies, technologies, measures and people.
By Nate on
6/20/2014 7:10 AM
What would be your dream job? If money were not a consideration, what would you do?
A recent Harris Interactive survey among almost 8,000 employees over the age of 18 found the following:
- 45% of workers said they were satisfied or very satisfied with their jobs
- 55% of workers said they were not satisfied
- 20% were passionate about their jobs
- 33% believed they had reached a dead end
- 21% were eager to change to something different
The above statistics paint a vivid picture of how elusive passion can be in careers.
Here are some more observations about dream jobs:
- Dream jobs are absolutely personal. Everyone has a different dream.
- Dream jobs are aligned with a person's core passion. Your passion is what you care most about in life. It is what attracts you and gives you energy. It is what inspires you, and what you can not live without doing.
- Dream jobs consistently leverage your core strengths and skills, draw on what you do best and most naturally, let you do what you are really good at doing.
- Dream jobs minimize the down sides, the things you don't like to do or don't do well. They accentuate the positive allowing you to focus your work time on activities you love to do.
- Dream jobs offer enough compensation to sufficiently support a life style that is acceptable and feels good. If a minimum level of income is not there, even an otherwise ideal fit may not be the dream job.
- Finally, dream jobs are not perfect jobs. Even when the fit is right, every job has some drawbacks
BOTTOMLINE: Stop "dreaming" - start doing. Take stock in yourself, identify your core skills, research the market - and go back to your passion.
By Nate on
6/13/2014 7:48 AM
"A brilliant strategy, blockbuster product, or breakthrough technology can put you on the competitive map, but only solid execution can keep you there. "
So begins the Harvard Business review article "The Secrets to Successful Strategy Execution" written by executives from management consulting firm, Booz Allen Hamilton, Inc .
According to the authors, "Execution is the result of thousands of decisions made every day by employees acting according to the information they have and their own self-interest."
Their research identified four fundamental building blocks executives can use to influence those actions:
- Clarifying decision rights (setting expectations)
- Designing information flows (making sure people are on the same page, have the right information to do their jobs)
- Aligning motivators (recognition and rewards consistent with attitudes, behaviors)
- Making changes to structure
By Nate on
6/6/2014 7:33 AM
The best performing small businesses have five factors in common:
- A strong leadership team
- The ability to attract and retain quality people
- A disciplined approach to their business
- The ability to strategically use technology
- The wise use of trusted outside providers
Top-performing organizations rate not just a little better in these five areas -- but at least 100% better. This whitepaper looks at the results of the research, and identifies five factors that the top 25% of all high-performing organizations have in common.
By Nate on
5/30/2014 7:54 AM
In general, strategic plans can fail for two types of reasons: inappropriate strategy and poor execution.
Inappropriate or ineffective strategies can occur due to:
- Failure to define objectives correctly
- Incomplete SWOT analysis with respect to the desired objectives
- Lack of creativity in identifying possible strategies
- Strategies incapable of obtaining the desired objective
- Poor fit between the external environment and organizational resources - infeasibility
More often than not, however, it's not that the strategic plans fail - it's theexecution that fails.
Here are some common reasons how or why execution falls short of the strategic plan:
- Over-estimation of resources and abilities
- Under-estimation of time, personnel, or financial requirements
- Failure to coordinate
- Ineffective attempts to gain the support of others or resistance
- Failure to follow the plan
- Loss of senior management focus and continued sponsorship
- Inability to predict reactions from competitors
- Over-estimation of resource competence
- Poor communications
- Failure to manage change
- Lack of focus
BOTTOMLINE: Failure to execute (following the plan) is the primary reason why strategic plans fail.
By Nate on
5/16/2014 7:12 AM
"The Keys to Strategy Execution: A Global Study of Current Trends and Future Possibilities", was a research study commissioned by the American Management Association and conducted by the Human Resource Institute.
The research identified the leading obstacles that hinder strategy execution and what companies can do to overcome them.
The following is a quick review of some of the main findings:
- Higher performers tend to be better at executing strategies
- Clarity is crucial to the execution of strategy
- Overall, organizations are not achieving clarity to the degree they should
- Higher-performing companies are much more likely than lower performers to provide clarity
- Alignment practices are widely used and highly valued
- Higher-performing organizations are considerably more likely to use certain alignment strategies
- Speed and adaptability are differentiators
- Decision-making speed remains a major problem
- Employee engagement is a concern
- Leadership development seems to be a deficit in the area of execution
- Customer needs/demands and worker capabilities are the most important drivers of execution today
- A lack of resources and the presence of government regulations are the primary barriers to strategy execution today
By Nate on
5/9/2014 7:11 AM
Strategy formulation, while extremely challenging and difficult, is usually not what concerns most small business leaders. In fact, it's not even planning that worried worries them. It's something even bigger and more problematic.
It's the execution of strategy that keeps many small business leaders awake at night!
Why is execution so hard?
Because making the plan work is even bigger challenge than creating the plan: Making strategy work is more difficult than the task of strategy making.
Execution is critical to success. Execution represents a disciplined process that enables an organization to take a strategy and make it work. Without a careful, planned approach to execution, strategic goals cannot be attained.
Developing such a logical approach, however, represents a tremendous challenge - particularly to leaders of growing organizations.
Here are the key take-aways:
- Making strategy work (execution) is critical - and much more difficult than strategy formulation
- Even the best plans still fail or don't meet expectations -- because of poor execution.
- Despite its importance, execution is often handled poorly by many organizations.
The continual problem?
Much more is known about planning than doing, about strategy-making than making strategy work. And business leaders still don't seem to understand a great deal about the execution of strategy.
The obvious questions?
The simple answer?
- If execution is paramount to success, why don't more organizations develop a disciplined approach to it?
- Why don't companies spend more time developing and perfecting processes that help them achieve their strategic goals?
- Why can't more companies execute strategies - consistently?
Because - execution is extremely difficult. We're all taught to strategize, and to plan - but little time is spent teaching (and learning) how to execute!
BOTTOMLINE: From the CEO on down, everyone within an organization must commit to and own the processes and actions related to effective execution. Everyone must learn to be accountable for their activities and projects, and these effort must relate to the goals, and ultimately the strategy of the company.
By Nate on
4/25/2014 7:20 AM
Why do most companies fail?
- Most companies fail primarily because they don’t have the right team of people
- The CEO might not be right, or the CEO hasn’t chosen the right people in the right positions
- Unfortunately, most new CEOs don’t understand the talent level required at each position and the teamwork needed to build a successful company.
- To have a successful company, most businesses need key people in several categories including research & development, manufacturing, IT, finance, marketing, sales, and HR.
BOTTOMLINE: Hiring right (from position description, to sourcing, to interviewing, to selection, to assessment, to hiring, to orientation, to development, to succession planning) - are all keys to building the right team. Done properly and repeatedly, the organization thrives. Ignore it, and the organization is doomed to failure.
By Nate on
4/18/2014 7:11 AM
A previous issue of the Harvard Business Review includes article entitled "Can You Say What Your Strategy Is?"
"Can you summarize your company’s strategy in 35 words or less? If so, would your colleagues put it the same way?"
"Very few executives can honestly answer these simple questions in the affirmative. And the companies that those executives work for are often the most successful in their industry."
"Conversely, companies that don’t have a simple and clear statement of strategy are likely to fall into the sorry category of those that have failed to execute their strategy or, worse, those that never even had one. In an astonishing number of organizations, executives, frontline employees, and all those in between are frustrated because no clear strategy exists for the company or its lines of business."
Leaders of firms are mystified when what they thought was a beautifully crafted strategy is never implemented. They assume that the initiatives described in the voluminous documentation that emerges from an annual budget or a strategic-planning process will ensure competitive success. They fail to appreciate the necessity of having a simple, clear, succinct strategy statement that everyone can internalize and use as a guiding light for making difficult choices.
Understand there are three critical components of a good strategy statement—objective, scope, and advantage. Then, create a great strategy, which requires careful evaluation of the industry landscape, a detailed understanding of customer needs, segmenting customers, and identifying unique ways of creating value for the ones your firm chooses to serve. Then, find the sweet spot that aligns your firm’s capabilities with customer needs in a way that competitors cannot match. Next, leave no room for misinterpretation and cascade the statement throughout the organization.
BOTTOMLINE: "Words do lead to action. Spending the time to develop the few words that truly capture your strategy and that will energize and empower your people will raise the long-term financial performance of your organization."
By Nate on
4/11/2014 7:10 AM
The importance of business planning is frequently misunderstood.
Here are 9 commonly-held myths: about business planning:
- Most small and new businesses don’t need business plans.
- You need an MBA to write a convincing business plan.
- Business plans are only necessary when you need to raise money.
- Business plans need to be long and address every last detail.
- Writing a business plan makes your business less flexible.
- Writing a business plan takes too much time.
- All the details of a business plan are just too confusing for a first-time business owner.
- You can get funding on the strength of a great business plan alone.
- If you’ve already launched your business, it’s too late to write a business plan.
BOTTOMLINE: As Dwight D. Eisenhower once said, “Plans are nothing; planning is everything.” He wasn’t actually saying that plans are worthless, of course. So what did the war hero and former President mean?
It’s the process of planning that is most important: where you consider opportunities and challenges and ways to meet them.
By Nate on
4/4/2014 7:33 AM
In sports, no one questions the importance of having a good coach.
In music, art, science, no one questions the importance of having a good mentor.
If you're running a small business, why should it be any different?
Yet, everyday, leaders of small and emerging businesses continue to waste thousands (if not tens of thousands) of dollars on ineffective means to the end: learning to develop a top-performing business.
We hear it from our clients all the time: "I spent thousands on books, seminars, consultants; we've gone through planning sessions, brainstorming, etc. - and none of it has lasted."
Frustrating? You bet.
Common place? More than we all want to admit.
Are you hoping for the best? Well, hope - is not a strategy.
Well, there's always "business coaching" - but buyer beware: You actually need more than just a "business coach."
You need a holistic approach - a complete program that includes a repeatable business-building methodology, an external business coach (for accountability), execution software that enages every person, every day, and access to a shared learning community for faster adoption and stronger organziational engagement.
Do you - and your organization- need more than a business coach? Are you challenged with any of these?
- A lack of a solid strategic plan - mission, vision, values, strategic position, vital few objectives
- A lack of well-defined goals - specific, measurable, attainable, realistic and tangible (deadlines and attributable responsible people)
- Wasted time and resources - your people are working on things that do not align with your strategy
- Procrastination, distractions and working on "urgent" things - rather than "vital" things
- Lack of individual accountability - and organizational "entropy"
Do any of these sound familiar? How about all of them? You aren't alone. Every client we talk to has one or more (and sometimes, all) of these challenges.
It's time you looked into Six Disciplines....
By Nate on
3/28/2014 7:16 AM
There's a lot of talk going on these days about accountability.
For some, it's important for their professional lives (i.e., setting business goals, keeping on track, being responsible, etc.) For others, it's more personal (i.e., diet, weight loss, exercising, etc.)
Whatever the case, it's important to understand what accountability is, and ultimately, how it works. Here's a short course:
What is accountability? Why is it important? If you walk into a room and ask ten people what accountability means, you’ll likely get ten different definitions. To some, it’s something you make people do, as in “holding people accountable”. To others, accountability means accepting responsibility, but only when a project goes off course, or it’s too late to fix. When it’s all said and done, a workable definition of accountability might include the following elements: Taking responsibility for your own behavior; doing what’s right consistently; demonstrating personal integrity, and actively participating in activities and interactions that support the strategy of your organization.
Now that we understand better what accountability is, now consider what it isn’t. Accountability is not something you “make” people do. It has to be chosen, accepted or agreed upon by the people within your organization. People must “buy into” being accountable and responsible. For many, this is a new, unfamiliar, and sometimes, uncomfortable way to work or live. Learning how to become accountable involves an element of discipline. Most importantly, individual purpose and personal meaning comes from accepting responsibility and learning to be accountable.
Holding people accountable is really about the distribution of power and choice. When people have more choice, they learn to be more responsible. When they become more responsible, they earn more freedom. By being accountable, they earn the trust of managers and coworkers. When they are more accountable, they understand their purpose and role within the organization and are committed to making things happen
How can you learn to be accountable for yourself? In reality, it’s very difficult to be accountable to yourself. Depending on your frame of reference (professional vs. personal) you need to find someone who can help you to stay on track, to stay focused. Accountability can be the catalyst for unlearning old habits, and learning new habits. For weight loss, it's the reason that WeightWatchers is a multi-billion dollar business. It's also no secret that the tremendous growth in business coaching (for example, like Six Disciplines) due to its success in applying the benefits of external accountability coaching.
BOTTOMLINE: Accountability and positive organizational change come through a new set of conversations. So, what are you waiting for?
By Nate on
3/21/2014 7:12 AM
The need for measurement may seem obvious, however, more often than not, it's overlooked as being unnecessary by many leaders of small and midsized organizations.
Let's look at the top 10 reasons why your organization needs to measure its results:
- Measurement clarifies expectations. Measures are a the most transparent and clear means to communicate expectations to employees.
- Measurement directs behavior. Most employees consciously or unconsciously operate on the following assumption: “tell me how you'll measure me, and I'll tell you how I'll behave.”
- Measurement increases objectivity. Measurement is essential to “managing by fact” – otherwise you are left to lead with charm and personality.
- Measurement makes performance visible. If it’s not being measured, it simply can’t be managed.
- Measurement focuses attention. When people are faced with so many competing priorities for their time and activities, what is measured tends to get their attention – particularly when it is linked to a recognition/reward system.
- Measurement promotes consistency. Unmeasured systems tend to be highly variable systems, with all the negatives for quality that implies.
- Measurement facilitates feedback. Feedback in the form of timely, relevant measures is the basic navigational device of any individual or organization.
- Measurement improves decision-making. One of the major causes of failure in decision-making is poor or non-existent use of data. One accurate measure can be worth a thousand opinions.
- Management promotes understanding. Quality guru W. Edwards Deming thought that systematic process measurement led to the “profound knowledge” that was essential to top quality outcomes.
- Measurement improves execution. As former Allied Signal CEO and co-author of Execution Larry Bossidy has remarked “when I see companies that don’t execute, the chances are high that they don’t measure.”
By Nate on
3/7/2014 8:30 AM
The Six Disciplines strategy execution program integrates the business-building elements of strategy, planning, organizing, executing, innovating and learning, and offers a systematic way for organizations to continually improve and achieve lasting business excellence.
You can think of the Six Disciplines Methodology as a series of annual, quarterly, weekly and daily repeatable cycles which, with each successive pass, helps individuals to be accountable, align their activities with organizational goals, and consistently execute on strategy.
So, what are the Six Disciplines?
Discipline I. Decide What’s Important. The foundation of all strategy formulation is deciding what is most important to your organization (and by implication what’s not important) so the allocation of resources—time, money and creativity—can all be aimed toward this end. In this discipline, organizations regularly review and renew their mission, values, strategic position, vision, their most vital few objectives, as well as agreeing what to stop doing.
Discipline II. Set Goals That Lead. Well-defined goals are among the most effective communications tools available to any leader—yet most leaders don’t know how to set goals that lead their people in the right direction. The purpose of this discipline is to produce annual goals that are clear and measurable. Pursuing these goals will lead the people in the organization to align their activities with the vital few objectives set in Discipline I. The result is a brief company goals statement that every team member can understand.
Discipline III. Align Systems. One of the greatest barriers an organization faces in pursuing its goals is itself. For many businesses, the systems that make up the business are often at cross purposes with the priorities of the company. Why? Because most organizations do not have an organized approach to keep their systems aligned with their strategy. Discipline III, taps the knowledge of the whole workforce to identify the areas where the company will get the greatest return on its investment in policies, processes, measures, technologies and people.
Discipline IV. Work the Plan. One of the greatest organizational learning tools ever invented is the quarterly Individual Plan. In this discipline, every person in the company works with his/her team leader to develop Individual Plans for the upcoming quarter. These goals are reviewed and checked for alignment with company goals. This quarterly plan serves as a timesaving template for a Weekly Status report. The result is that every individual in the company learns how to set goals, understand company priorities, takes responsibility for their own activities, and reports progress regularly.
Discipline V. Innovate Purposefully. Innovation is just another name for problem-solving, and everyone in the company has the ability to solve problems. This discipline is unlike the rest in that it provides tools and principles that are used throughout the other disciplines to help people set clear goals and eliminate barriers to progress.. These goals will align with company priorities, and then employees use their innate creativity to meet or beat those goals. Empowering principles, such as Embracing Constraints and Taking Informed Risks, plus tools like the 100-Point Exercise and 5-Step Problem Solving, are but a few examples of what’s included in Discipline V.
Discipline VI. Step Back. This annual discipline helps the whole organization to step back from the pressure of everyday business and gain perspective on the factors that affect business performance. This is achieved through a series of “discovery exercises,” exploring externals (competitors, industry, economic) and internals (goal performance, stakeholder feedback, measures, etc.). In addition to the organization as a whole stepping back, all individual team members are encouraged to do the same by providing input on each other’s performances. This is achieved by completing a 360° and an annual performance appraisal for each team member.
BOTTOMLINE: The Six Disciplines are described in detail in the award-winning book, Six Disciplines for Excellence, available here from Amazon.
By Nate on
3/5/2014 8:08 AM
Most organizations suffer a major disconnect between strategy formulation and its execution.
And while it's more pronounced in larger enterprises because of complexity, smaller organizations need to make sure they do something (anything!) to remove the barriers to execution.
Unfortunately, the research doesn't bode well for most of us. Consider the following:
- 90% of well-formulated strategies fail due to poor execution.
- 60% of typical organizations do not link their strategic priorities to their budget.
- Two-thirds of HR and IT organizations develop strategic plans that are not linked to the organization's strategy.
- 85% of leadership teams spend less than 1 hour per month discussing strategy.
- Only 27% of a typical company’s employees have access to its strategic plan.
- 70% of middle managers and more than 90% of front-line employees have compensation that is not linked to the strategy.
- Most devastating, 95% of employees do not understand their organization's strategy.
Strategy must be managed explicitly, like any other major process in an organization. In most organizations, this process either does not exist or is incomplete. However, 70% of organizations that used a formal process to manage strategy out-performed their peers. What formal process are YOU using?
By Nate on
2/28/2014 8:10 AM
Here's a profound observation from management guru, Gary Hamel:
"If you want to understand the real strategy, look at what people are doing!”
Indeed, more often than not, there are disconnects or gaps between the strategy that is formulated by the senior leadership team, and how the strategy is executed by the rest of the workforce.
Why the gaps?
Could be for a number of reasons:
Most likely, the recognition and reward system that drives the daily activities and behaviors of each person in the workforce is not aligned with the strategy of the organization. How to combat this situation?
- The strategy is not accessible/available to the workforce
- The strategy is not sound
- The strategy is not well understood
BOTTOMLINE: What people spend time on should be based on how well your strategy, goals and initiatives are articulated. Reward and recognize workers based on how well goals were achieved (results), not on how much activity took place.
- Make the strategy as transparent as possible. The mission, vision, values and strategic position of the organiztion MUST be transparent and available to everyone within the organization.
- Establish Vital Few Objectives (VFOs). Most organizations have 2 to 5 times as many projects and initiatives going on than they can possibly address. Reduce the number of key objectives. Keep the VFOs simple - financial, customer, production, people - and let everything else go. Be very focused on a few things, and do them well.
- Make the VFOs measurable. Define measures, targets, and create a small number of initiatives that support the VFOs. Assign responsibility and accountability to someone for each VFO.
- Define an Individual Plan for each person. On a quarterly basis, develop a plan for every individual, assigning activities from each initiative. Have each person track time and progress toward achieving the stated outcomes. Measure progress and update status weekly.
- Align recognition and rewards based on the achievement of outcomes. Recognition and rewards systems are not to be based on activities, but results.
By Nate on
2/21/2014 8:46 AM
Here's a real shocker:
In a survey of 3,300 senior managers and human resource professionals reported by Rob Lebow in his Washington CEO magazine
- 75% of all organizational change programs fail
Why is change so hard
Most organizations say their most important assets are their people, but few behave as if this were true. Change initiatives typically devote most budgets to structural issues such as technology and processes, not staff issues. There is still a whole notion of focusing on tangible assets and their impact on the bottom line, rather than the intangible assets, which are people
.Organizations don't adapt to change; their people do
Constant change in the organizational environment mean that leaders must not only learn about change and its impact on people and systems, leaders must be able to master the process of implementing change
, just as their employees must learn to accommodate change.
Why do most change efforts fail? Here's an analogy: As with a transplanted flower, it initially wilts after the transfer. However, in time with proper care, it stands upright again. With continued good care, it blossoms. The same holds true with the introduction (transplant or transfer) of a new system (a new idea, business-building method, best-practices, business improvement processes), the productivity curve drops (wilts) - but given proper support and care, the productivity curve loops upward on a continuous positive trend.
is little understood by business leaders, but it is a fact of organizational change.
Some misread the downward curve (wilt) as failure, often triggering inappropriate actions; rather then understanding it as transition trauma that is a normal readjustment, realignment and adaptive phase of change
that requires trust, patience and on-going support.