The new world of leader and employee alignment requires a much more considered, ongoing, two-way model of engagement in order to effectively drive business strategy, writes Jon Williams.
And for many years this was how organisations thought about executive and employee alignment. Set the strategy, identify success measures, cascade them in a direct path through the organisation so that everyone was “lined up” and could pass processes, products or customers from one to the other on a straight path of efficiency.
In this way the “strategy” – really just the plan for the next twelve months – could be assured of being successfully executed.
Unfortunately, as the old army saying goes, no strategy survives contact with the enemy. This approach typically only works right up until the moment your strategy changes because of a new entrant to the market, or tactics have to be altered due to a new technology, or the economics of the market shift and decisions and structures need to change.
But, if your goals are locked in for the year, with bonuses and promotions attached to them, these real world changes won’t result in a matching shift within your organisation; there’s too much at stake for individuals and they “know” what they are supposed to be doing (let alone the psychological impact on those who came up with the strategy in the first place).
“Unfortunately, as the old army saying goes, no strategy survives contact with the enemy”
We often say that success is not the result of the small number of big decisions that an executive team makes, it is about the large number of small decisions that employees make.
And yet many organisations still believe in the supreme importance of the killer strategy – maybe it’s the lure of the perfect idea, product or service that not even their staff could screw up. In reality, whilst those do exist, they are rare. You are far more likely to succeed by coming up with a good strategy, one that fits your organisation better than anyone else and then living or dying by the quality of your execution.
But, much like trickle-down economics the current business environment has been unkind to the idea of cascading goals. Not only is the idea that everyone in a reporting structure can possibly have goals that “roll-up” to their boss’s, and to their boss’s boss’ goals illogical (and simply unthinkable in any matrix organisation), the notion that these things will stay stable for a whole year is equally unlikely.
The execution approach where we assumed a stable world in which you could set your three-year strategy and establish your one-year KPIs and then stand back to admire no longer applies. In this world, it still made sense to get your whole extended leadership team together annually and run them through the plan for the year … what the overall goals were, what targets would trigger incentives and what they were expected to do.
This approach, focused on clarity of corporate communication/directions was very good at helping people understand what they needed to do in the year ahead. Unfortunately the world has shifted and focus now needs to be not on what to do – but on why we are doing it … building depth of understanding for employees about the drivers and trade-offs within the vision for the organisation so they can make decisions that are supportive and in alignment – and not counter to achieving organisational goals.
“Once a year is not often enough to be talking to your senior teams about your strategy – it changes more rapidly than that”
And as we know, Goodhart’s law says that once a measure becomes a target, it ceases to be a good measure. Blindly following cascaded targets, because they link to incentives and they are “in the plan” leads to rigid, unresponsive, slow-changing organisations chasing measures for measurements sake, not striving to achieve alignment with the higher goals of the organisation’s vision.
The new world of leader and employee alignment requires a much more considered, ongoing, two-way model of engagement and one which focuses on knowing why and when to change not on mechanically following instructions.
The five steps to new alignment
Once a year is not often enough to be talking to your senior teams about your strategy – it changes more rapidly than that
Only teams engaged in the business really know what they need to do – don’t tell them how they are going to deliver the strategy, ask them
Doubling growth or tripling profit isn’t a strategy – it’s an aspiration. Make sure the strategy has clear, actionable components that leaders can work on
Not everyone needs to be in every alignment meeting – identify the issue being discussed or shared first and then work out who you need in the room
The quietest voice often knows the most about the reality of your strategy, make sure they get to be heard.
Source: Inside HR