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Blog, Book & Podcast
by Van Fleisher & Todd Ritchey

CSM CHAPTER 2 – ALIGNMENT

The Art of Getting the Right People Doing the Right Things

At the end of each financial year, 67 to 90% of all companies will fail to achieve their strategic plans.

  • How can that happen?
  • Why does it continue to happen?
  • Is strategy that hard?

Larry Bossidy, former Chairman & CEO at Allied Signal and Honeywell, would say just the opposite:

“Strategy is easy. Execution is difficult.”

Independently, these are overly simplistic. Execution must be an integral part of a business strategy if there is any hope of success. The right way forward is, “what is our goal, and how will we achieve it?”

But there’s one more element needed if there’s any hope of reaching your goal, and Bossidy nails it.

“Organizations don’t execute unless the right people, individually and collectively, focus on the right details at the right time.”

If we consider strategy within the context of CSM, we could think of it like this:

  1. What are the goals, vision, and realistic aspirations for our organization? These can be stretch aspirations with on and off-ramps and detours.
  2. Do we have the resources and the available markets to achieve these plans? Do our people agree? The key is getting buy-in from your people. 
  3. Do we have a plan to achieve our goals and a mechanism to track and adjust? This part of achieving your strategic objectives is critical. 

Pretty commonsensical.

Setting & Committing to a Strategic Plan

When I first started in management consulting, we would begin each assignment with a Q-Sort exercise amongst the leadership team. For those unfamiliar with Q-Sort, it’s a methodology to investigate participants’ perspectives and their stances on an issue. In this case, the participants were asked to rank and sort a series of statements related to the company’s goals and direction. 

The results were plotted on a compass-type graph, and almost always, the answers given were chaotic snapshots in every direction. If true north was the most accurate – and this was most often the direction chosen by the CEO – the other participants were headed in every other possible direction. 

Thirty years later, as the norm, we still find that only 51% of the leadership team can articulate the company’s top priorities. And that means, as you’d expect, 22% of senior managers, 18% of middle managers, and just 13% of supervisors have a decent grasp of the company goals.

Knowing this and understanding how important alignment is, we like to begin the goal-setting process with a strategic maturity assessment amongst the leadership team. The assessment process accomplishes three things:

  1. It provides a structure for inclusiveness and the communication process.
  2. It defines your team’s beliefs about the business’s general areas of strengths and weaknesses. A heat map helps focus the debate and clarifies the actions required. The discussion should lead the team to the prioritization of those actions.
  3. The discussion will also shed some light on your team’s interpersonal dynamics, such as communication, cooperation, openness to change, challenges, risk, etc. Depending on the discussion, we often suggest some personality profiling to ensure we have the right people to achieve the critical goals. 

Most strategic plans are hatched in the board room, and there will be disparate levels of buy-in and ownership even within that relatively small group, as described above. This is partly because of the perceived relationship between a job position and a goal. The VP of sales may understand their role in achieving sales growth of 15%, but perhaps less clearly concerning the goal of improving the corporate accountability target. As the plans are cascaded down through the organization, the lack of clarity will worsen

Two key ways of mitigating goal clarity erosion are excellent communication and using a form of roles and responsibility matrix to align jobs with strategic goals.   

Strategy execution depends on each member of your organization’s daily tasks and decisions, so everyone must understand the company’s strategic goals and how their responsibilities make achieving them possible.

A role and responsibility matrix might look something like this:

  1. What resources do I control directly within the organization to get the job done? (span of control)
  2. What measures will be used to evaluate my performance? (span of accountability)
  3. Whom do I need to influence to achieve the goals I’m accountable for? (span of influence)
  4. How much support can I expect when I reach out to others for help? (span of support)

Think about how Sue, the production manager, might put this into context:

  1. Our company’s goal is to increase sales by 15%.
  2. Given the increase in pricing, I’ll need to increase output by 12%. I’m operating with only 90% of my team and the second line has continual maintenance issues. 
  3. I’ll fail to deliver based on what they’re asking unless …
  4. I’ll need to get maintenance to get line 2 running consistently and HR to get off their butts and fill my open positions.
  5. My VP has assured me that he will ensure my issues are resolved, so yes, I’m in. 

Anything other than this will put at least one of the goals in jeopardy. And it’s not that simple. If Sue fails to deliver the 12%, Tom, the sales manager, will fail to achieve his goal, as will Mary in supply chain management, the VP of Sales, and the company.

Communication

At this point, the leadership team is hopefully clear and aligned with their strategic plan. They should be able to describe their strategy to others succinctly and in plain language. And this includes the execution aspect.

We’ve fallen in love with OKRs – Objectives and Key Results. They are simple to track and monitor, they are transparent, and they definitely fall into the realm of CSM. We’ve devoted Chapter 4 to delve into the details of OKRs, but here are some high-level concepts, and an example.

The leadership team should come away from their strategy session with their OKRs and a plan to cascade them throughout the organization. 

The objectives answer the question: “Where do I want to go?” and they should be aspirational. For example, the company agrees that part of its strategy is “We will become the market leaders in our sector this year.”

Each department head might then establish their Objectives in support of this, for example:

  • Sales: Increase sales by 17% per quarter
  • Manufacturing: Contain manufacturing cost increase to less than 5% to maintain competitiveness
  • HR: Ensure critical sales and production vacancies are kept below 5%

Key Results in those areas might include:

  • Increase sales visits by 10%
  • Decrease defects by 15% 
  • Maintain a backlog of 10 candidates for sales and production

The execution plan should have a monitoring and tracking system and a schedule whereby every business level participates at different intervals.

Alignment 

As we’ve said earlier, successful strategic achievement begins with creating and promoting transparent and measurable goals and aligning individual efforts and collaboration around the highest priorities of the business. The right people doing the right things is the hallmark of an excellent execution culture.

I’ll repeat Larry Bossidy’s words:

“Organizations don’t execute unless the right people, individually and collectively, focus on the right details at the right time.”

Clear communication can empower employees, and this is especially true when it comes to strategy execution. Before the pandemic, more than 90% of employees didn’t understand or were unaware of their company’s strategy.

How bad is it now? 

A robust OKR process is an antidote for lack of clarity because everyone’s objectives and key results should be aligned with and feed into company goals.

Good communication skills and events will boost your organization’s performance and empower your employees. From the CEO down through the organization, everyone should be pulling together in the same direction, focusing on execution.  

It’s time for Laugh or Cry.

During a ‘day-in-the-life’ of a beer company’s sales representative, I observed him generously offering significant discounts to his customers, even when there appeared to be no reason for it. When I asked him how he was measured, he “guessed” volume, but I knew it was margin based on my discussion with the CEO. Back at the company offices, he showed me a current list of the salespeople, listed in order of their… sales volume!

Here are a few more examples of misalignment and miscommunication.

A steel water pipe manufacturer developed a strategy to add value to its pipes by drilling threaded holes based on the customer’s specifications. They set a goal of a 5% revenue increase, and customers were buying them at a faster rate than estimated. 

Business was good until we, the consultants, realized that they were still selling the pipes the old-fashioned way – by the weight. And so, every hole drilled lightened both the pipe… and the revenue!

Another failure to communicate cost our mushroom growing customer a million dollars a year. The pickers’ training program omitted the fact that a mushroom could be sold with a full one inch of stem. Their pickers had been leaving a million dollars a year in the ground.

In the last of our three weight-based LOCs, our yarn-producing client spent hundreds of thousands of dollars running their warehouse’s air-conditioning excessively, over-drying their yarn which was sold by weight. The electricity costs and the reduced income from their over-lightened yarn approached a million dollars.

Key Takeaways from Chapter 2

  1. Strategy must always include execution. What is our goal, and how will we achieve it?
  2. Use OKRs to communicate, align and execute.
  3. Make sure your leadership team is comprised of the right people, doing the right things.
  4. Accurate and well-communicated roles and responsibilities will help alignment.
  5. Alignment is a bi-product of effective communication.
About the Author

Van has worked in over 30 countries helping large companies and small. Author, mentor, board member, CEO, and team leader have been some of his job titles, but his passion is helping businesses succeed through their own employees' efforts.

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