Friday, July 23, 2010

STEP 2- Critical Success Factors: "How Do You Get There?"

After the Main Thing has been defined, the next question is “how do you get there?”
This brainstorming exercise is best served by people talking to each other to really understand the essential, critical success factors (CSFs)to accomplish the mission of the “Main Thing” and be filtered downward. This is what is called Vertical Alignment. The Power of Alignement, Wiley 1998 . Weak leadership, at any level of this deployment process will cause variability in the way the MT strategy will be executed.

Brainstorming includes asking the question, “What is unique to our business that if we can achieve a bunch of critical steps, we can be successful?”. Each “Main Thing’s” CSFs must include examinations of existing Leadership and Culture as two of the essential components.

Leadership: As we know, not only is it critical to articulate, communicate, deploy the MT to the workforce, but people must know “how to get there”. This “how to get there” must be effectively understood, tools to get there, communicated with uniformity, and with sincerity through the various roadmap, they need to deploy. What are challenges they face? What are the baselines? What does the workforce need to in the form of tools, leadership, culture shifts, emotional realignments, training, learning’s and communication skills to “get there”?

The finest measurement/diagnostic tools must be used to establish this baseline. Diagnostics must contain fine tuned analytics so that each department local manager will get a clear x-ray picture of their department, assessing whether those competencies exists to achieve best practices of each of the items or questions nested in each of the CSFs.



Culture: Effective execution is critically impacted by the organizations culture.





Remaining CSFs: Strategy makers know what needs to be done to reach the goals established around the main Thing. To get there, we need to to this and that. It’s the “this and that” which comprise the 3-5 critical success factors. These steps must be defined at the strategy level. These steps to success must be brainstormed, messaged, fishboned or whatever tools used, so there is a clear path or series of achievements to be met.

Take for a real example the President of a bank that wanted to grow his commercial banking business by 15% in a year. These are clear fined goals; an understandable Main Thing. His critical success factors were: Leadership, Culture and customer focus.

LEADERSHIP: He knew for his leadership, he needed to know his manager’s ability to delivered, by learning if his vertical alignment of leaders, at all levels and in all department, had capabilities, or needed help, to lead in 6 essential areas: Change, communication skills, industry knowledge, immediate supervisor leadership and vision and strategy.

CULTURE: Motivation, teamwork, job knowledge and integrity

CUTOMER FOCUS: Technology, Expand the business relationships, drive the business development, quality service and bank service

An “amazing win” for this leader was profitability, but he knew what his organization needed to do, the strengths he needed to expand or the needs of his workforce he wanted to fulfill. For this leader, he knew that without taking the time and energy to clearly define his goals and mission and how to get there, these essential, critical measures would be left to others. Usually those other have not the same passion or insight, and there is no message more powerful than that of the “boss defining the way”.



EXECUTION:

The theory and models of success have been define by the leader, but execution is becomes a very large stumbling block. What is even more troubling that good execution at parts of the organizations, coupled with fair or medioca execution in most of the organization and poor execution in a portion of the organization will lead to varying levels of conflict, inefficiency, ineffectiveness. This is what I describe as “aligned performance variability”. Take the example of an 8 cylinder , hi performance engine, the “hemi”, but working 2 cylinders are performing perfectly , 2 are operating at 80% capacity, 2 at 60% and 2 at 20 %. That’s performance variability..

There are many reasons for this inexact delivery or deployments system. The reasons can stem from culture issues, communication, poor trust issues, weak managers, angry workers, and so on…The fact is that there is a disappointed, frustrated leader who anguishes as his or her best plans of utopia for the shareholders and the organization are languishing. Frustration turns to acceptance, turning to expensive fix-it plans created internally or by consultants.

SOLUTIONS:

Eliminating performance variability of the holy grail, the “critical success factors”, but by each demographics or department is the solution. Is a global, off the shelf training program, the answer? How about a manger retreat where power points of survey scores are plastered on screens and the audience visibly gasps and then goes back to “the old normal”. Not by intentional fault, but by lack of an effective plan of solution.

Failure of changes management or business transformations are not the “cross to bear “ of any particular leadership group. Sporadic improvements, not sustained, will revert back to the “old normal” as the people expected to perform are plain old people with the frailty of humanity. Compounded by then putting groups of these people together, with varying degrees of commitment, gender differences, education, love hate with manager, with each other certainly makes a global training program’s suspiciously effective.

This is but one department. Now add 20-50 to 500 more departments. The expectation of leadership that each depart will execute upon the decreed “critical success factors” with dispatch. Idyllically, if each department can and will, with the same degree of success, the leaders “Main Thing” will be achieved.

STEP 1- Main Thing: What is it? - The Leaders Responsibility

The starting point is making sure the leader has established and articulated a “Main Thing” and everyone knows about It. A Main Thing might also be coined, as what “an amazing win” looks like for that leader. Usually it’s about profitability, growth or meeting customers 100% satisfaction levels. It might be linked to building organic growth, profitability, or defining the essence of where you hope to be in the next year or two.

Most strategists have a way of connecting the strategy to customers, their buying habits, satisfaction, or even creation of the passionate, loyal customer. The research cited in The Human Sigma, defines and argues for a new level of customer connection far beyond meeting customer expectations.

Usually all strategic action and mission statement have a direct correlation to satisfying a customers need so they buy from you, buy more from you and as often as they can. Some might describe it as the mission statement, a vision, or goal setting, but the “Main Thing” can be much more.

Take for example the B14, a tool for a bank leader.

The B14 (there are 14 critical measures) targets all of the internal competencies needed by the workforce to achieve the goals of organic growth in the banking business. Start with the universal conclusion that a bank leader who has a clearly articulated, targeted focus of their “Main Thing” (goal, challenge, or purpose), successfully executed throughout the workforce by and through committed and competent local managers, will outperform their market by every possible measure.

Banking, like all other customer focused industries, requires a leadership AND workforce focused on creating a service culture that is aligned with their “Main Thing" and a strategy of creating a passionate, loyal customer. The challenge is how! B14 is a unique "tool" application just for the banking industry. This "tool" was conceptualized by a Regional President of a multibillion dollar bank, with over 30 years of banking experience.



This new, intrinsic application spotlights the 14 critical success factors which are the requisite workforce competencies needed for the growth and alignment of the banking business. This banking tool, "B14", provides a bank leader with the cost effective means of executing a tightly focused growth strategy with established criteria unique to banking. A leader can expect to heighten workforce performance, while eliminating variability, by addressing and improving these 14 validated factors.

This seasoned bank president has “cracked the code”, paving a rapid means to bring the bank's organization into alignment with their "Main Thing"- rapid growth in the retail and commercial lending sector of the banking business.

However the “Main Thing” is defined , we repeat, it must be clear, articulated and communicated and MUST be interwoven into the fabric of the culture of the organization, especially in each departmental level. This is the sole obligation and responsibility of the leader to make sure this essential step is fully complied with.




NEXT- STEP 2: Critical Success Factors

Wednesday, July 21, 2010

HI-Performing Organizations and Engagement

Employee engagement is a precursor to developing a hi performance culture. In a study of 2,178 business units from 10 companies, research evidenced that workforce engagement predicted levels of performance. Harter,J.K., Schmidt (2005, August). Employee engagement and business unit performance: A longitudinal meta-analytic study of casual direction. If employee engagement is formulated by the local manger’s behaviors, style and the created local culture, managers need as much help as leadership can provide. This relationship, known as vertical alignment, is managed with ease using the 30 second manager tools, and a defined system containing essential elements of leader focus, communication and unlimited support for the people responsible for executing the leader’s strategy.

In summary, the workforce responsible for executing the leader’s vision must first become “engaged” in order to become a high performing workgroup. To transcend this model from a concept to a reality, by leader being very clear on the vision, (MT), a team of leadership and managers defining what they need to know about competencies, processes, tools and workforce engagement to “get them there”. Theses will be the “Critical Success Factors.”

Look for our next post: "Step 1- The 'Main Thing'- The Leadership Responsibility"

What Makes a Hi-Performing Organization

Organizations need to create higher performing workforce cultures, coupled with a new competency of nimbleness, if they expect to continue creating value for their shareholders. A high- performance organization is one where all departments are in sync, working together, and aligned with each other so as to provide to their customers the very best, on time delivery of your services or products. Anything short of that state of excellence are the results of varying degrees of misalignment. In that reality, expect impacts upon customer loyalty, profitability, process, people, culture and all those other states of being that create loss or create organic growth.

High performance is impossible to achieve so long as there are variability’s in work force performance. Simply stated, departments that are performing at different rates and levels of performance, efficiency and competence, within each of the critical success factor critical to the leader’s declared mission, which results are a touchstone to the customer buying criteria, is a recipe for loss in profitability and /or growth. This is not a trivial matter, as the larger thevariability of workforce performance, the larger the gap between the organizations delivery systems and its customer satisfaction.


What causes variability in workforce performance, within similar workgroups, has been the source of much study but the research that resonates is “among the many variables that discriminate between highly productive workplaces and those that are unproductive, is the quality of the local workplace manager and his or her ability to meet a core set of employees’ emotional requirements.” Primarily, emotional conditions are described as those that meet basic human needs. Buckingham,M & Coffman,C. (1999). First Break all the Rules: What the world’s greatest managers do differently. New York:Simon and Shuster. Coffman, C. & Gonzalas-Molina,G. (2002). Follow this path: How the world’s greatest organizations drive growth by unleashing human potential. New York:Warner.

Not only can that hard evidence of variability of performance can be found in every organization’s cost accounting systems, but each department’s variability of output contributes to the bottom line in uneven contribution. Now we’re addressing performance or engagement of the workforce, but by department, by department, by department. Why does 1 department outperform another? To discover this cause and effect is the “holy grail”.

Each department has their own leader that creates the culture for that department. This local culture may or not be the same culture declared as the corporate way of doing business. It’s that simple.

The solution is having a strong corporate Leader that has the insights, tools, the will, and crystal clear strategy and system that will assist each of the local managers to eliminate performance variability in their respective departments. Easy to say, hard to do; until now.

Here’s the ultimate goal. Each department delivers the best output possibly, focused upon each of the designed, “critical success factors “consistent with the leader’s stated mission. That’s high performance execution strategically linked to profitability. Expect organic growth. Eliminate lop sided delivery. Gets that HEMI engine working on all 8 cylinders! I am not suggesting robotizing the employee organization as that’s trying to regulate humanity. Realistically, it’s both impossible and ill advised to harness people’s human emotion, but performance and workforce efficiency, if managed, hard coded, rewarded and targeted to each of the missions critical success factors, will excite. Thus, this workforce engagement falls squarely on the shoulders of the local manager. This manager engagement falls squarely on the shoulders of the leader.