While working with business leaders, I often hear – we yet again missed our monthly / quarterly / annual targets…
The business leadership spends hours and days during various management meetings to talk about what`s going on (and often they are at a loss!), and even scale down plans / targets. Even bigger amount of time gets spend on writing mails, making spreadsheets & power-points reporting back to the higher level leadership.
But, then…comes the next month / quarter and things haven`t changed. Revenues and / or profits are yet again below plans (and sometimes even below revised targets). Or, while revenue numbers have been achieved, they came at the cost of profitability. And, then yet another round of explanations…I call this the cycle of CYA (Cover Your A**).
In such situations, I encourage the leadership to step back a bit and ask three fundamental questions…
The foremost (perhaps a hygiene factor, yet very pertinent) being – Are your plans / targets based on a specific set of actions? OR… perhaps a composite of wishes, `finger in the air` or even prayers?
I am an optimist and a big believer of BHAG`s (Big Hairy Audacious Goals). But for me, it`s critical that the BHAG`s are ambitious yet grounded and having well defined steps to milestones.
And, for the BHAG`s to see the light of the day – it`s critical that the organizational / BU level business plan is owned up by the larger organization.
Hence, the second critical question – Is the business plan a sum total of the bottom up ?!
Role of the leadership is to provide strategic direction to the business and create the appropriate governance, structure and support mechanisms to ensure that the managers and the individual team members are establishing operational level goals, the specific relevant actions (or even tasks) to achieve those goals. I encourage leveraging `Hoshin Kanri` to accomplish this objective.
However, in today`s complex geographic, matrix organizational structures and high degree of inter dependency between various functions, locations et all – it`s becoming ever so important to go beyond the Hoshin deployment and ensure organization-wide alignment.
Often I come across a specific function not being able to deliver its goals and / or spending lots of energy & time towards attempting to get other contributing functions to deliver. This could be triggered by factors such as – objective cascade inefficiencies and ineffectiveness, personalities (of functional leaders / team members) or the sheer fact that there`s always more to do than the resources available.
To address such pitfalls, `Mission Alignment` is a potent approach wherein – upfront the functions come together to specify critical inter-dependencies towards achieving the organizational and individual function goals. All such inter-dependencies get factored in and get added to the original plans / deliverables for each individual function. In my experience, sometimes such mission alignment interactions lead to eye-openers wherein a function did not even have a perspective of its contributions towards another function`s goals.
A sincere effort combining the power of Hoshin and Mission Alignment enables the organization to ensure the tiering & inter-connectivity of objectives from top most strategic level to the bottom down operational & transactional levels.
Now, that we have a BHAG driven and a bottom up business plan in place – success should be imminent! Yet, it doesn`t always happen so easily. You might have the best strategy in the world, BUT, if you miss out on the execution – you reach a dead end. There`s so much written about the “strategy execution gap” (google throws 31,000 results and amazon has 5,300 odd books around this topic!). The impact of the execution gap can be enormous BUT often avoidable.
In my experience and opinion – one of the most critical tipping point / reason for the strategy execution gap is the organization`s learning culture. Hence, I ask the third question – Do you really really deep dive into, and learn from your failures & successes?!
In one of my recent engagements, wherein I was establishing the strategic road map (including execution plans) for one of the Business Units, I got to hear from the senior leadership that we need to reduce the growth targets vis-a-vis revenues & profitability. This was despite the fact that there were market opportunities to be harnessed & exploited, and capabilities being established by the R&D and Marketing groups towards the same. The rationale for suggesting to reduce the growth targets – sales organization won`t be able to deliver and has failed to deliver in the past. I asked for the sales lead conversion rate and analysis of previous sales opportunity management efforts. And, guess what – there were no numbers – no analysis.
I follow a fundamental principle – `whatever gets focused gets measured, whatever gets measured gets reviewed, and whatever gets reviewed gets improved`. So, I got the leadership to deep dive into new business development and sales efforts…It took lots of mandays, several focused meetings and few hard discussions but results followed soon…
It can`t be denied that it takes a lot of humility on part of the organization, it`s leaders and people to recognize, acknowledge and focus on failures, instead of rationalizing or worse off, ignoring them. Once you have acknowledged the gap, doing focused CAPA (corrective action preventive action) or equivalents to enable results is the most logical next step. But, to begin with – you need to put the `fish on the table`.
However, for me the biggest gap is not so much on the failure front but more so towards the successes. How many times have you seen / done a deep dive or a 5 Why analysis of a success story in your organization?! Interestingly, Google search for “root cause analysis of success” gives only 8,260 results compared to 139,000 for “root cause analysis of failure”.
While successes are recognized and celebrated, high performers rewarded – rarely I have come across situations where the organization and it`s leadership has put in focused efforts to identify the leverage factors (systems, processes, practices) to sustain, enhance, replicate and wide-spread the successes.
We often speak of the models, processes, tools and techniques that can help organizations in their pursuit of reducing this gap between strategy vs. execution, but much less about the behaviors that are vital if we are really to succeed. For me, the leadership of today needs to focus as much or even much more on these more challenging aspects that stimulate & enable success, and reduce the gap between its strategy versus results.