Three Ways Executives Stumble

Intention is everything when creating strategic and business plans. Too many executives use annual plans as a “snapshot” or “State of the Enterprise” presentation rather than a dynamic instrument of changestumble. AH Maslow is credited with developing the Cycle of Change which identifies three transformations to achieving change. They are: awareness that change is necessary, identifying what needs to change, and understanding how the change can be achieved. If managers are not deliberate with each step, much can go awry. These are my top three ways to stumble:

Failure to recognize how fast customers will evolve: Companies are sustained by learning to time product introductions to a market window. A proven process to capture customers’ future preferences and strategies is a given requirement. Even the best market intelligence, however, will only render a hazy outline of how your product offerings need to evolve. Understanding key material, tool, and process trends provides more clarity on product cycles. Intuitive customer understanding and the ability to predict schedules and cost, however, is the “secret sauce” for a winning product program. And while the biggest prizes are awarded to disruptive products that leapfrog the competition, ideas cannot be so innovative that customers fail to understand their value. Apple is recognized for the graphical computer interface and personal audio player; but was not the first to market either of these products.

Reluctance to lead change: I have seen executives who desire organizational change stumble when they did not factor how they need to change. When people are presented with a new idea, over half the population will respond by rejecting the idea until it can be proven to their satisfaction that it’s a good idea. While clear communication regarding what the change is, why change is needed, and how the organization will benefit is vitally important, leading by action is equally as important. Allowing employees to participate in planning change, working to build trust, and involvement in demonstrating the changed behavior will help achieve success.

Inadequate reallocation of resources: Executives worry how change in their business might unsettle customers’ willingness to buy. Businesses will often attempt to maintain both old offerings and services while the replacements are being developed and introduced. The decisions businesses make regarding capabilities, skill development, and capital are impactful. How often have we seen?

  • Acquisition of new systems while skimping on the necessary implementation training
  • Jobs eliminated while neglecting to resolve how responsibilities will be reassigned
  • Incumbent employees assigned to master new technology while restricting ongoing education

The ability to forecast capital requirements and cash flow is an invaluable skill. The discipline to release high-skill employees from marginal product lines without disruption will lower stress on the organization.

I have seen attitudes toward strategic planning jaded by these missteps. The rewards of management team learning to be proficient at planning, however, make learning worthwhile.

 

 

Do You Confuse Vision and Mission?

Whenever I work with a group regarding strategic planning, I find the wordsvision-mission vision and mission often need definition. Perhaps some of the confusion comes from faith-based organizations using the word mission to mean what a commercial organization often calls vision. Simply put, vision is a description of how your organization expects to improve the welfare of your customers and community and mission describes how you will progress toward the vision in the short term. Let us address the two terms in detail:

Vision: The Internet has made it possible for every enterprise and individual to capture a global audience if they have a message the world finds interesting. The vision is a succinct, compelling statement describing who will benefit from the existence of this operation and how. It is the “punchline” for why people should buy from you, invest in you, and work for you. The focus is on how you want the world to perceive what your organization will become. Visions are supposed to be a bit hazy. This is because they ideally deal with qualities and character more than tangible actions. My suggestions for vision statements are:

  • Remember words of appreciation you have received from customers and integrate exactly what they appreciated in the statement
  • Prepare a list of three to five descriptors that you would like people to use in remembering your organization. Think about how they fit into your vision.
  • Include all of the relevant characters in the vision (i.e. customers, employees, surrounding community, etc.)
  • Use visual, metaphorical language and try to keep it under 25 words if possible
  • If your statement proclaims the organization to be a leader or “#1”, be sure it is evident how the world will come to that conclusion

Mission: The mission statement highlights the few areas of focus in the current planning period. Mission statements leave no doubt on what will be done and the result to be achieved. My suggestions for mission statements are:

  • Vital missions target innovation and change. Remember that customers just assume you deliver quality products and services and do not need to embark on a mission to do so.
  • Focus the organization on the critical goals and results to be achieved
  • State how the organization will be held accountable. Include measures, priorities, completion dates, and who will lead the mission
  • Mission goals should be realistic and supported by describing investment of talent and capital to involved parties.
  • Review mission progress on at least a quarterly basis

This is how I introduce these key concepts. For a leader or executive, these two elements are the most important part of a strategy. Please share your comments on best practices for vision and mission.

Singular Focus Bests the Competition

DSC04155-BWe are approaching that time of year when we make and forget resolutions. Verne Harnish in “Mastering the Rockefeller Habits” wrote that effective business leaders identify just one high-priority goal to be accomplished over the next 12 to 18 months. The power of one shared goal greatly increases the likelihood that the goal will be achieved.

Goals fall short when the safety of the status quo outlasts the desire to see a change of fortune. The obvious advantage of one goal is focus; not just for you but for the organization as well. There are three areas where focus can provide the leverage to achieve change and results: innovation, priority, and accountability.

Innovation: The most dramatic change comes when organizations take a fresh look at a challenge that replaces a process; rather than doing the same thing faster or cheaper. Having a single goal fosters broader cooperation and collaboration that will break down resistance to change.

Priority: Whether you are a one-man shop or a large corporation, time spent on activity that does not support the goal threatens success. Insufficient resource in a particular skill area is the killer of many initiatives. Departments and individuals are far more likely to schedule activity or volunteer resource if they attach some urgency and importance to a single goal.

Accountability: One advantage of a single goal is that the scorecard is fairly simple. Initiative will flounder if there are no measures in place to measure progress. The common excuse is that it’s difficult to project schedules and cost for something an organization hasn’t done before. The discussion surrounding setbacks and disappointments will often reveal a new approach to the solution. (See Innovation.)

Another key success factor in achieving positive change is picking the right goal. The business leader needs a process for researching markets and technology that guarantees the goal is meaningful and realistic for the business. An experienced strategist can guide and direct a leader through an effective process.

Wishing you every success in 2015!

The Labor Day Milepost

Labor Day stands for so much in the popular culture. To beachcombers it means the end of summer, to parents and it means the return to school, and for executives it means the final stretch of the fiscal year. Skilled managers have a strategic initiative that will change the face of their business.  Labor Day is the milepost when it becomes obvious whether these initiatives will succeed or fall by the wayside.

If you don’t have an initiative; why not? All executives, regardless of how the business is growing, need to assess strategy, structure, and critical resources on a regular basis. Managers who are successful achieving initiatives pay close attention to three elements:

  • Clear communication of what the change will look like, why the change is needed, and what is everybody’s role in the change
  • Frequent reporting of progress and holding people accountable for their role
  • Clarifying what the organization will stop doing to free time and resource to achieve the goal

Many managers stumble when they are unable or unwilling to pull resource from short-term objectives or that they feel that achieving short-terms is sufficient for long-term success. Great leaders focus on what the organization needs to become and have confidence their organizations can adapt to solve short-term problems.  

Labor Day is a time when executives begin planning for the coming year and ask these questions:

  • Are there performance shortfalls in my company I should be concerned about?
  • Have there been recent events or new competitors that have changed customer preferences in your market?
  • Has the willingness of employees to innovate and extend themselves grown or ebbed this year?
  • What’s the greatest obstacle we will face in 2015 and how will we overcome it?

If you struggle with any of these questions, there’s a good chance I will be able to help.

The Dangers of “Wait and See”

It seems that the new American sport is second guessing how Congress will handle the Sequester and our budget dilemma. The truth is that we all hate the anxiety of waiting for a decision that weighs heavily on our future. It’s important for business leaders to remember that the same anxiety is playing out on a smaller stage with their employees. A colleague of mine, Grant Tate, wrote a blog titled “Eye Rolling Epidemic” that recounts how easy it is for managers to duck responsibility for employee engagement.  It is estimated that, on average, only 70% of employees are engaged with their employer. I’ll wager that anyone with a car or appliance that was performing at 30% less performance would fix it.

I can recall leading a program bid that our company desperately needed to win. We were locked in a heated competition with an archrival that involved a protracted negotiation and creative counterproposals. While I was pleased with how the competition was progressing and confident that we would win, my fellow employees were worried sick. Careful analysis of every facial expression and email proliferated rumors and hand wringing. I found that I could never spend too much time with coworkers sharing my perspective on what was going on and how we were going to win. We eventually did win. But I think the factory floor workers were every bit as exhausted from the negotiation as the sales staff.

In time of uncertainty, it’s best for leaders to share the basis of their decision process with the entire organization. Tactics I recommend are:

  • Don’t sugarcoat. Give a balanced view of opportunities and threats
  • Let people know what strategic options are being considered
  • Let the organization know where they can give input and how they can support the planning process
  • Reinforce both organizational and individual strengths and capabilities
  • Identify the critical measures for the organization and frequently update on progress

If you have your own ideas on how you’ve led teams through uncertainty, please feel free to share!

What Are the Blocks to Culture Change?

Many companies today are asking themselves how they can be more innovative with respect to new products and services or quality improvement. Winning companies have created environments where employees feel encouraged to offer new ideas or even experiment with different approaches to old problems.

Culture can be simply defined as the way organizations go about getting things done. These behaviors are shaped by our knowledge, skills, and attitudes and, with information networks today, obtaining new knowledge is limited only by our curiosity. Curiosity and other innovation qualities are rooted in the values and beliefs that shape the organization’s attitudes; and these attitudes can become toxic limiters to success. For example, can an organization really evolve to a “LEAN culture” if the production engineers don’t believe that assemblers and operators can make meaningful contributions to enhancing complex production processes? Or, can the communication between two departments really improve if they believe each other are jerks? After the obvious toxic attitudes have been removed, organizations can address skill development. Skills develop best when individuals are offered the coaching and repetition to develop the skill.

Culture change entails a big commitment from top management. Although I’m biased, I believe an outsider to the organization can contribute greatly to dispelling the myths and beliefs that impede organizations. Activities which can encourage change are:

  • Clarify and discussion strategy and goals with all your employees. Make certain everyone knows their role in the plan.
  • Be certain that all employees have goals and that they are measurable. Develop supervisors to discuss obstacles and shortfalls in the spirit of improvement.
  • Recognize all initiatives; not just the ones that succeed.

 

Why Strategic Goals Are Not Achieved

It’s the start of a new year with new budgets and plans; and the air filled with a renewed sense of opportunity. All too often, organizations fall short on the previous year’s planned initiatives and skip into the new year without reflecting on what happened. Shortcomings can be caused by events out of one’s control. There are common management errors, however, that cause plans to fall short. What follows are a few of my favorites:

  • Strategic goals were not expanded into SMART task lists with a name assigned to each task. The acronym SMART stands for Specific, Measureable, Attainable, Relevant, and Timely. It should never be assumed that individuals will assume responsibility for a task without being asked. Also, the expectations for each task need to be “crystal-clear.” Management needs to pay particular attention to the Attainable element. Setting too many goals for the resource available guarantees some objectives will not be met.
  • Initiatives are not properly prioritized throughout the organization. Strategic initiatives often compete for the same resource that is responsible for turning revenue each month. My experience is that strategic is always trumped by the pragmatic. It is also important that personal and department incentives are compatible with achieving the strategic goal.
  • Inadequate management review of strategic goals. Reviews can uncover a number of issues before they derail the plan. It is important to assure that communication across departments is providing compatible priorities and smooth handoff of input for the next task. Sometimes organizations will discover through implementation of the task list that the perceived opportunity of the goal is not what was previously envisioned and communicated to stakeholders. It is important that management identify the contingency plan on a timely basis to preserve the credibility of the planning process.
  • Management insensitivity to change. Critical goals usually introduce significant change to an organization. It is vital that the goal be sold to every level of the organization and that objections be properly listened to. Employee engagement is an invaluable means to improving and accelerating achievement of the goal.