The Need for Speed ~ Driving Pace in Your Organisation ~ Part 2

AlignmentIn part 1 of this four part series of blogs I covered the importance of PACE to improve organisational effectiveness and speed and specifically Planning:

PACE = Planning + Alignment + Communication + Execution

The second part of The Need for Speed ~ Driving Pace in Your Organisation will focus on Alignment of your organisational structure, your people and your rewards and performance management capability.

Alignment

a) Organise your teams around your One Magnificent Goal! – Your OMG!

The benefits of a well aligned team are no surprise to anyone. A great deal has been written about how to create better alignment within teams, through team building, incentives, and other management techniques. However, the first step in any effort to improve the alignment amongst a group must start with an honest evaluation of the current state, and a desire to improve and a clear view as to where you’re going.

Convene a group of key managers within your organisation to help you look at the impacts, both positive and negative, of your current organisation structure and how it might look when aligned to your OMG. When realigning, you want to ensure that you don’t lose any core competencies. You also want to ensure that any proposed changes will support the goals you have set as well as continue the things your business already does well. A group of managers who understand the detailed workings of your organisation will help you greatly.

Develop several alignment models from which to choose. Consider movements with your existing people, additions, subtractions and combinations of these things when devising different structures that might support your goals. Use organisational charts to help you express these models so they are clear and tangible.

Solicit input from other business leaders you know, respect and trust. Examine the financial, strategic and organisational culture impacts your various alignment ideas might create in order to help you to arrive at your decision. You also need to understand any Human Resources / Employment Law ramifications of your decisions before you begin to implement.

b) Align performance goals and rewards around your OMG

To ensure achievement of your OMG you must align all your teams’ performance goals and rewards to it. In so many organisations, individual departments have separate performance metrics that do not align to their OMG. More importantly people are often rewarded against Key Performance Indicators that are misaligned. Some common examples of this might be; Sales are paid on revenue and the OMG is to increase margin; Customer Services are rewarded against hitting call statistics when the OMG is around improving customer satisfaction. Neither is complete misalignment, but both can cause a big enough gap in behaviours for the OMG not to be achieved.

When metrics and rewards systems are not realigned with changes in structure and business processes, the impacts are predictable:

• Individual performance targets compete with the OMG.

• Roles and accountabilities are confused or continue to be aligned around the old organisation design.

• Decisions are made to optimise performance in one unit contrary to the needs of the larger organisation.

• The organisation is slow to act and burdened with internal conflicts.

• Leaders resist change (because it is rational to do so when incentives encourage old behaviours).

• Individuals begin to question the impact of the organisation design changes on their personal economic well-being, distracting them from winning in the new formation.

Again, sound out your leadership team to ensure that cross-organisation goals and rewards are not in conflict with each other before you implement. Talk to leaders and managers in other companies to get some broader context of what works and doesn’t work elsewhere.

It’s really important that the reward structures align from top to bottom within your organisation and there is an OMG specific payment when you achieve it – A Long Term Incentive. That encourages everyone from Executive to Admin Assistant to shoot for the OMG. Obviously the levels of reward might be different, but everyone wins when you achieve your goal!

c) Push decision-making authority as far down the organisation as possible

In the era of organisational flattening, there are less and less layers of management. We are happy about getting rid of hierarchies, but we are less good at understanding the associated challenges. If a layer of management disappears, decision-making should go to the lower level and not to the higher one. A reorganisation where layers go down from 6 to 3, but where senior management absorbs most of the decision rights that became available tends not to work effectively.

A consequence of decision-making being pushed down is that there are many new ‘decision homes’ where empowered people could make a decision on the spot. One of the big problems associated with decision rights flowing upstream, to a higher level, is that these decision rights tend to go or be deferred to the management bodies that only meet from time to time.

So, pushing the decision rights down to a lower level also means that many decisions could be taken ‘in real time’. Provided that people are empowered to do so, there is no reason why they should delay the decision-making process. Pushing decisions downstream and making decisions ‘in real time’ as much as you can are two simple disruptive rules. They won’t cost much but they have the power to transform your company on a big scale.

Some principles you should consider:

  • Implement decision-making at lower levels across the business, not just in one or two departments
  • If something can be decided at a lower level, it should. And you should make it lower and lower all the time.
  • If nothing can be decided at a lower level, you are the problem.
  • Your management goal is to decide less and less every day.

‘Closure’ and decisions made in meetings and committees may be efficient, but not necessarily effective if it could have been done at a lower level.

The amount of ‘deferred decisions’ (as opposed to real-time ones) in your organisation is a good indicator of your agility and empowerment. How many organisation even measure this I wonder?

d) Clearly defined roles & responsibilities

In order to effectively manage your people, it is important to provide them with a clear definition and understanding of their role, function, and responsibilities in the workplace. This will provide them with a good understanding of the job and tasks they are to perform as an individual and within any teams they are a part of. It also provides information on where they fit within the organisation and who they report to, helping to avoid disputes and misunderstandings over authority.

Failing to define workplace roles and responsibilities can create tension, miscommunication and inefficiency within your business. People may be unsure as to what jobs are their own and who they are required to report to. Mistakes and omissions can also occur where people are unsure of what is required of them, therefore creating inefficiencies which cost time and money.

e) Stopping projects / activities that don’t support the plan

Tighter goal alignment and goal visibility allows for quicker execution of organisation strategy by enabling your management team to more effectively allocate resources across various projects. By exposing business initiatives not aligned with your OMG, it also increases overall efficiency by ensuring employees are not duplicating the efforts of others. Plus, goal alignment strengthens the leadership at your company by allowing managers to:

  • Understand more clearly all responsibilities associated with specific goals
  • Eliminate redundancies across job titles
  • Focus their staffs on your company’s most pertinent goals

So, you’ve now got the right people, organisational structure and performance culture to deliver your plan. In Part 3 of The Need for Speed – Driving Pace in Your Organisation,  I will be look at the third element of PACE, Communication.

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The Need for Speed ~ Driving Pace in Your Organisation ~ Part 1

Driving PACE in your organisationSucceeding in today’s competitive business environment requires that your organisation be agile enough to respond quickly to internal and external change. To stay ahead, you have to explore new ways to grow your business – for example, by launching a new product or service or targeting a different marketplace. Speed and focus could become your biggest competitive advantages.

For this to succeed, you will need to rapidly align resources and people so as to drive speed, efficiency, and profitability. But how do you achieve this level of organisational agility – and ensure focused execution across your business?

The key is driving organisational alignment – an elusive goal for many companies. This requires strong executive alignment, an organisational mind-set that values performance management, and the ability to perform effectively. Once these elements are in place, you need baseline information to devise the right strategies, a clear understanding of interdependencies, and insight into where to deploy personnel and budgets. To drive adoption, you must communicate strategies to employees in ways that they understand and embrace and that are within the context of their roles. You must provide the right tools and incentives to help them execute on a daily basis and in alignment with corporate strategies.

However, if your organisation is like most, there is a significant gap between strategy and execution because of breakdowns in one or more of these areas.

You need to consider how to implement PACE in your organisation: Planning, Alignment, Communication and Execution

This first post, in a 4 part series, will focus on:

Planning

Why is planning so important and why must it be done in parallel with strategy? From a macro perspective, business today gets done in a global marketplace. Change is occurring at an unprecedented pace. Time and distance continue to become less and less relevant thanks in great part to the explosive growth and convergence of technology and the internet.

There was a time when strategic planning was done by only the biggest companies, and those who lead change. Now it is a requirement just to survive. Leaders of business must be looking ahead, anticipating change, and developing a strategy to proactively and successfully navigate through the turbulence created by change.

a) Clarity of Strategic Goals and Markets

How are you going to get somewhere if you don’t know where you are going? Everyone in an organisation needs to know what you sell or do, who your target customers are, how you compete and in which markets you operate. A good strategy will balance revenue and margin generation with productivity initiatives. Without strategic planning, businesses simply drift, and are always reacting to the pressure of the day. Companies that don’t plan have exponentially higher rates of failure than those that plan and implement well.

For many business owners and leaders, creating a vision, company values, and a strategic plan can be a daunting task for reasons like time, energy, commitment and lack of experience. It requires business leaders to accept that yesterday’s success does not ensure success in the future. It requires challenging the status quo, potentially changing behaviours, implementing new procedures, hiring different people, and putting new systems in place in order to deliver on the strategy.

Make no mistake; the best plans and ideas without great execution are just plans or ideas, they don’t result in much of anything. Regardless of the size of a company, a strategic plan is the foundation on which all business activities can be connected and “aligned”.

b) OMG! – One Magnificent Goal!

The idea for One Magnificent Goal is derived from the fantastic book by Jim Collins and Jerry Porras; Built to Last: Successful Habits of Visionary Companies – They termed it ‘BHAG – Big Hairy Audacious Goal’

OMG is THE goal that really stretches you to think differently about how you do business. It’s THE goal that is going to help you transform your business, rather than being satisfied with incremental change. It’s THE goal that’s going to inspire you to do your best work and outshine your competition.

What is THE ONE BIG aspirational idea that your people can really get behind; that will really make them deliver +1%?

  • It could be Target Driven –  JFK’s – ‘this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to Earth.”
  • It could be Competitor Driven – Crush Adidas! (Nike, 1960s)
  • It could be Role-model Driven – Audi’s OMG in 2005: To match the exclusive image of mighty Benz and BMW
  • It could be a Business Transformation – Amazon.com: Every book, ever printed, in any language, all available in less than 60 seconds

When you consider OMGs for your organisation here are some key points to keep in mind:

  • It should be so clear and compelling that it requires little or no explanation
  • It should fall well outside your comfort zone
  • It should be so bold and exciting in its own right that it will stimulate progress even if the leaders disappear
  • It should be consistent with the company’s core ideology

If your OMG doesn’t meet these criteria you should really think again!

c) The Plan Itself

If you are serious about reaching your OMG, you have to develop a plan that  clearly takes you through milestones or even better,  ‘Inch Pebbles’ to meet that OMG. If you don’t, you can’t even  expect to get close. You have to do more than you have ever done. You also have to look for  new and creative ways, to get to the result.

I’m not, in this post, going to be prescriptive about how you build a plan, but I would ask you to consider the following questions:

How do I bridge the gap? – How can you most effectively get from where you are now to where you want to go? And in what time-frame? What strategic initiatives are needed to bridge the gap?

What are the controls I need to put in place? What monitoring, project management, reporting, and performance management do I need to put in place to achieve these initiatives?

What people do I need to ensure I reach my OMG? Will the team you have today be enough to deliver your OMG? Do you need more people or different people? Do you need to change the people (training & development) or change the people (restructure & recruit)?

Can I afford to do this? What costs will be incurred in delivering the initiatives that will help you reach your OMG? Over what time frame? What would be the cost of not doing them? What contingencies do you need to put in place along the way if some of your initiatives fail?

Answering these questions will help you formulate your plan.

So, you understand the market place and your strategic ambition within it, your OMG. You have a plan to achieve it. Have you got the right people, organisational structure and culture to deliver it? In Part 2 of The Need for Speed – Driving Pace in Your Organisation,  I will be look at the second element of PACE, Alignment.

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