In a recent Leadership Report, I said “Results don’t change unless work changes.”
If your business strategy isn’t explained in a way that connects people and their work to it, don’t expect much to change.
Business strategy formulation is typically about a series of long, secretive, offsite top management meetings followed by all employee meetings where PowerPoint slides outline “our plans for the coming year.” After a few questions and answers, people shuffle out of the room and back to work. And they keep doing what they were doing before the meeting. Nothing changes.
I’m advising a client now who is doing strategy right. They know that only five to ten percent of the strategy process is about creating the strategy and that the other 95 percent is about execution—the hard, down-in-the-trenches work day after day– doing the right things precisely right.
To our client, strategy is an iterative process, a back and forth conversation among groups of people—leaders who clarify direction and the people who do the jobs every day. Everyone in the company will be able to translate the overall strategy to what they do each hour of each day. It’s exhilarating.
What are they doing?
As expected, they’re doing due diligence—identifying strengths, weaknesses, opportunities and threats, conducting deep market analyses and building action plans that align business units and corporate plans. But this is the run-of-the-mill stuff that Michael Porter, the Harvard Business School strategy gurus of gurus, would tell us all to do.
Our client is taking the process to another level, and it’s the level that will pay off most. Our client is going beyond the all-employee meeting, and connecting directly with the strategy executioners who do the work in the hallways, cubicles, offices and with the customer on the phone and in the field. They recognize that their people are confronted with decision moments every day and that each decision and the action that’s taken needs to be guided by the overarching business strategy.
What the organization says and does to communicate what’s important shapes how employees act when they’re confronted with decision moments hundreds of times every day.
Do I return a customer’s call or delay calling that customer?
Do I say ‘May I take your order?’ with a smile, or ‘May I take your order?’ with resentment?
Do I make sure everything is done in a way that best serves the customer or do I make sure that I do everything by the book?
How well we connect the strategy to employees’ decision moments and the work that needs to be performed plays a huge role in whether we execute our strategy well or poorly. It starts with making sure every person understands the financial and operating goals and how they can make those numbers go up and down.
For instance, a primary financial goal of another client we advised is operating income or OI. By explaining the details of OI and how everyone benefits when targets are met or exceeded, each employee can better understand how he or she can positively affect OI. Armed with this information, employees are equipped to change the way they do their work so it improves operating income and its many components. The company benefits as do all of the employees.
Connecting the people to the business strategy paid off for our client.
Overall productivity went up 7 percent.
The ROI for there whole effort was 1,148 percent.
Total cycle time improved by 31 percent.
Inventory turns improved by 18 per cent.
Safety went from 13 recordable accidents in one year to zero recordable accidents in the next year.
So as you build and implement your business strategy, remember that no strategy is really executed in an all-employee meeting. It’s what’s done after those meetings — in the cubicles, hallways and field with customers — that determines average or excellent execution.