Much of CEOs I talk with spend a lot of time thinking about ways to drive growth of their business. Perhaps they never even stop thinking about it. And after they work on it a lot, they tend to engage their exec team on the topic. Once that level of discussion has happened, a group of incredibly talented c-suite people have figured out how to “grab” on to what it is they need to do.
But the key question remains, how do employees “grab on” to the strategy? That’s the question Dave Hersh of Jive Software was thinking about a few weeks ago. What is the “Best Practice” if there is on on this. Ever since then I’ve wanted to write this up so that he and countless others can benefit from a model Rubicon deploys that truly is best practice. It turns out writing it down is actually harder for me than doing it; so it has taken about a month to get around to it.
Dave was asking for ideas on like: What are the ways employees visualize the direction in a way that is meaningful to them? What is the right scorecard/heartbeat to use for the exec team v. the company? How do you avoid silo-izing the functional units? And what are some ways of doing this kind of direction setting in a way that is built for speed?
These are all valid questions and practical enough that you’d think the answers to them would already be well known. But because these are in some ways “the how” of strategy, it’s left off the table as less important than the what of strategy. My contention of course is that strategy that defines the what but leaves the how to chance will likely not achieve it’s goals. Let’s think about how to build the bridge across this great divide.
After all the planning a CEO and the exec team do to figure out what they need to do to win, they have very little ways of then managing that process. Yet, all experience and the many, many books on strategy prove out this one truth: strategies fail because they are not executed as designed. The company and it’s middle management leadership don’t “get” what the top execs got, or interpret it a new way, or simply fail to align the different knobs and levers within the organization to create the right ultimate outcome. I often use the term alignment to describe this. Lack of alignment then is seen as the gap between what the CEO/C-Suite wants to achieve and the ability and priorities of his/her organization to execute it real time. It’s the difference between strategy as theory and strategy as results.
Why does this happen?
Well I’ve already mentioned the lack of “getting it” or “ misinterpretation”. This can be classified as unclear communication.
We don’t often track for the how vs. the what. Rarely do people not want to help the company be successful. But they don’t yet know how. So here’s the thing about strategy. It normally requires a change. Some times a big change, sometimes a little change. But a change. So what we asking people to do is to shift something they are already doing (likely well) to a new thing and cause that to line up with new things other people are doing to create a new outcome. Yet we rarely ever put into place a way of knowing if people have changed the way they are doing thing.
Sometimes, it can be due to the wrong people in the wrong jobs.
Sometimes this is due to the fact that the strategy calls for a different DNA in the organization. Without putting something new in, it can’t create a new outcome.
These are all valid and very real reasons why strategy remains theory. So the question then to strategy success becomes a “how” question — how does a CEO align the wood of the organization behind one arrow? How does it know if the organization is adopting the strategic direction and instilling it through the nested strategies that happen at the division, business unit, or departmental level.
We’ve been working with global brands and aspiring global brands and one thing we work with them is to instill a way to manage the delivery of “what” once they decide the “what”. Getting to the what (right strategy) is hard but having it then not be executed on is in my eyes worse. I’d rather not have tried to achieve great new things like winning a breakthrough market or defending against a competitor. But once my exec team and I have agreed on something, I want to make sure we hit it. Beyond my exec team, I want to ensure everyone down to the guy shipping product is working towards the same goal.
The question starts with this:
Given our strategies, what would each part of the company need to do? It’s important to know that you need to figure out exactly what needs to get covered.
Then a constraining factor.
A method that works, easily. Meaning I wouldn’t need to explain something as ephemeral as “strategic planning” or “hoshin” process to people.
This same method would let me track progress.
As I’ve come up the ranks at Apple, GoLive and then Autodesk, I’ve tried a bunch of things that were as I look back way over complicated. Perhaps I still had something to prove or I had no clue what really worked or the MBA experience affected me a wee bit too much.
Nonetheless, now I advise clients like VMWare, Nokia, Adobe and others. Those clients as well as my own team now do operating plans with a very simple model. We call it the Top 10 Model.
This management system has the component of letting strategy and objectives flow through out the organization and creates a heartbeat method of knowing if things are flowing or not.
To start, the process has to begin at the top. Not that objectives can’t be shaped by the organizations closest to the operations but that ultimately there is a leader responsible for spearheading the direction of the company. Top 10 starts from the top. Based on the vision and mission of the organization, the CEO (in collaboration with his exec team or not) develops the top 10 goals that will move the needle of the company forward for this given period. (period = year). This is the way the mission will be delivered on this year. In other words, the strategy is not a concept but a set of ways and means that the broad objectives of the company will be met.
Alignment has to be a process of creating cascading strategies. Each member of the C-Suite or Executive Team prepares a list of his or her Top Ten Deliverables that s/he was focused on. Everyone has a list. Everyone. Then someone compares that if the top 10 were done by each of the exec team, would the top 10 be done for the company. In other words, if you take apart the pieces, can they be put back together and sum to the right total.
Many strategy books regret to tell you that every strategy must be specific. Strategy typically is defined as the “win market share” kind of objective. But for strategy to become reality and affect the necessary change, a deliverable has to be VERY concrete. Concrete means things like: win IDEO as a partner, close the contract with Bain for $10M, release Strategy Audit offer 1.0 to 50 key customers. Concrete means that you know exactly when it is done. It cannot leave room for interpretation only because interpretation allows for two people with good intent to both use the same words and still not achieve the same result.
A deliverable has a name assigned to it: Every deliverable has one name. I call this the “person to shoot” or “person whose throat my hands will wrap around if something goes wrong.”
A deliverable had a deadline, a day associated with it. Not “Q1” but an end of Q1, March 31st would be better. What we want is absolute clarity of a what/who/when.
To drive alignment, it’s important that the executive gets a chance to make sure there is 100% coverage and that the E-team is aligned. If you think about it, if you get it wrong between this top group, the ricochet affect of that lack of coverage gets bigger and bigger as you go into the organization. Therefore, every executive members presents his/her Top Ten list to the entire ET. Each deliverable has to be scrutinized to make sure that the sum would deliver the objectives of the company in the right time. And the ground rules for these discussions have to allow for challenge and clarifying questions. Sometimes, it’ll help to have this facilitated due to its importance. Many deliverables have critical interdependencies. Duh. Think about it. One party might sign up for signing a major OEM deal but that deal will likely need engineering’s support or channel management infrastructure, etc. Another example, the VP of Operations commit to drive an operational improvement in systems architecture by July 1, and for this to happen, he/she needs the requirements by January 30th, or 5 months prior to the delivery. To do that, the VP of professional services needs to sign off on the prototype in one week, and funding of $800K needs to be available in Q3. These interdependencies have to highlighted, reviewed in detail and negotiated upfront. This lead to an intense discussion on what, how, who (resources) and by when. But without that negotiation, what you are left with is not an aligned or agile strategy but hope. And hope is not a strategy.
Deploying the Top Ten process in the organization. Once the executive team is satisfied that the Top Ten lists are now well vetted and considered, each executive would go through the same process with his/her direct reports. And so on and so on. All the way through. Same process. Would the accomplishment of the parts as they happen deeper in the organization allow for the top 10 objectives of the company to be achieved. if you take apart the pieces, can they be put back together and sum to the right total. That’s the fundamental question that each team needs to be clear on. Each senior manager developed his/her own list and took it to his/her people. Every single department of the company had its own list and each manager was accountable for meeting each deliverable. This takes at most 2 months to do because of the cascading effect; I use 2 months to represent the process in multi-billion dollar firms. It can be as short as a 2 week period in more entrepreneurial firms. The time taken is more about deliberation and understanding then writing the lists. But taking the time means that every single one of the team knows how his/her role ties to the bigger picture. This causes alignment. And Focus. And if done right, motivation to help the team succeed. It could go without mention that promotions, incentives and disciplinary actions are tightly linked to this process. You don’t reward something beyond these goals. Doing #11 without doing 1-10 is not going to lead to success in the long-run.
No top 10 starts out and ends the same. Because in the end, it is still a planning tool regardless of its simplicity. And planning usually has to be tweaked once it encounters reality. Also, no organization chooses lightweight goals. At least no organization I know of. The top 10 goals regardless of level within the organization are often challenging to achieve and, sometimes, required organizational adjustments and listed key recruitments. They made it clear what was expected from the organization, who was accountable for what and what functional teams would be judged on, with a clear deliverable owner.
SO now I’ve spelled out what it takes to create alignment.
Let’s focus next on measuring progress because of course alignment is still conceptual until you see how you’re doing with results. Measuring progress has to happen in every management review. Meaning the once a month meeting, go through the top 10 review of the company / team / division. Talk through status, progress, and potential roadblocks. Place special emphasis on finding out what is not on track or could go off track to identify ways to help one another. The reason for this is partly about measurement, but also about making sure no one loses sight of what matters. Focusing discussion on what matters causes what matter to be focused on. If it looks like a deliverable is in trouble, the executive in charge is responsible for raise a red flag and gather a team around him/her to figure out how to correct course. Most organizations I’ve worked with have some kind of QBR process where they focus on scrutinizing the what and wherefores for programs, tasks, budgets, etc. And frankly I wonder if that leaves enough time to talk about the big picture. I have a template I’ve created around this and would love to share it with anyone who’s interested; email me.
What this heartbeat process then gives us a clear process that results in some benefits even MBA types would like:
* Guaranteed that the firm is aligned in a concrete way on what strategies they will pursue.
* There is no gap between strategy “theory” and the understanding of it.
* Demands the team to understand interdepencies. I am specifically not using team work. Because often that has come to mean singing kumbaya rather than doing something. Teams are not abstract things: each leader has to understand his/her piece and how it relates to the other parts of the strategy. This means that there is some preliminary development of plans to support the strategy before actual work is done.
* Then they are expected to commit or clearly communicate lack of commitment so that agreements will be honored. And then, they are expected to deliver on his/her piece, no excuseS. No time for politics.
* Ensures that you can measure people’s effectiveness. It became objectively clear who was pulling his weight and who was not.
* Top management now has a process tool to assess if responsibilities are being carried out to know if on track or not.
* Leaders communicate crisply to each other and deeper into the organization.
* Allows strategy to move to execution that can be measured by time. In today’s fast change, agility matters. And velocity of execution can be a key differentiator.
* Any “excuses” are raised early and resolved. Then, the dialogue turns to how to deliver, as opposed to why we cannot deliver.
* Provides visibility into progress, and enable tighter market and analysts forecasts.
* Creates a common vocabulary of what is important and who is doing it. This strategy then becomes the “lingua franca” for the organization.
* With one process to do this, it insists that the company execs get clear before randomly driving their organization to do things. Thus thinking precedes doing. The focus then is clear.
This does work. It is a rather simple discipline that can lead to clarity and alignment. Plus it lets everyone agree early on on what matters and how you’ll know if you’re on track. For all the work done on culture definition as key to competitive strategies. Very few actually give a tool that creates a culture of performance. I’m going to advocate that this really does.
There are particular situations where this model won’t be applied. One such example is when the CEO is a heroic leader who believes the goals process should be ‘self-evident’ and therefore doesn’t want to do a structured process to allow many people to see/ experience / discuss the goals in such a way that they engage at their level. This CEO isn’t recognizing the fundamental truth of change. It has to engage people. Almost all major strategies and things that will be on the top 10 are significant projects. Those inherently require both intra- and interprocess cooperation, so that plans work a cross-functional, cross-departmental and cross-process manner. Extensive discussions within and between departments and process owners are vital to the success of the overall plan. That’s why this process works.
Hope that helps, anyone and everyone. We’ve all seen how the movie ends with bad strategy execution. Let’s see if we can create a new kind of ending with this heartbeat tool in place.