How to Align Everyone to Organisational Outcomesby Stacey Barr |
It can be a struggle to align everyone to organisational outcomes, or the corporate strategy. But the solution is not to make up dubious linkages. The solution is to remember that an organisation’s strategy is not the same as its business model.
It’s a common complaint, that a team can’t see how they directly contribute to the current corporate strategy. They see no clear cause-and-effect relationship between what they do, and what the corporate goals are about.
The problem isn’t with the strategy.
It’s not wise to expand the strategic goals to ensure they are directly relevant to every part of the organisation. Strategy, according to Michael Porter, is about what not to do. It should be specifically focused, ruthlessly prioritised, and only about what needs to be improved. That’s what a Results Map is perfect for.
So, depending on the strategic environment an organisation finds itself in, of course there will be many parts of the organisation that don’t have to change in order for the strategy to be achieved. So they won’t see themselves in the Results Map. Nothing wrong with that.
The true reason for the complaint that a team can’t align itself to strategy is, I suspect, more about the team wanting to know what is most important for them to focus on.
Everyone can align to the business model.
The business model for an organisation has several fundamental parts:
- Mission: the purpose for the organisation existing
- Customer Outcomes: the outcomes the organisation delivers to its customers, so that purpose can be met
- Core Processes: the system of customer-facing processes that define how the organisation operates, to deliver those outcomes to its customers
- Support Processes: the system of internal-facing processes that provide whatever the core processes need to operate
As an example of this, my own business model looks like this:
- Mission: help more organisations reach high-performance sooner and with less effort (the top grey box in the model)
- Customer Outcomes: leaders know how to create a high-performance culture, performance measurement practitioners know how to use measurement to enable a high-performance organisation (the bottom grey box in the model)
- Core Processes: some of mine are the PuMP Partner Licensing Program, the PuMP Blueprint Workshop, the PuMP Community, and the Evidence-Based Leadership Program (they sit inside the green and purple boxes in the model)
- Support Processes: some of mine are the Measure Up newsletter and LinkedIn connection building (which sit inside the red box in the model), and creating new intellectual property and designing new products and services (which sit inside the blue box in the model)
Strategy is a subset of the business model.
A strategy is not the same as a business model, although there are plenty of organisations that I’ve seen get this confused. Consequently, their strategy is complex and bloated and impossible to execute.
Strategy is the selection of results from throughout the business model that are currently the most important and urgent to improve. It’s not everything; in fact it’s only just a few things. And it’s the current business environment and current internal performance that help to find these urgently important things (what a SWOT analysis does).
This year my strategy is focused on just a small part of my business model:
- Improving the PuMP Community so it helps more PuMP graduates complete their pilot implementation (which will increase their success in rolling out better performance measurement throughout their organisation).
- Streamlining and standardising my selling process so it serves people even before they become clients, and so it’s faster and easier for me to make a regular habit.
- Boosting my marketing outreach activities to reach more people who are struggling with performance measurement and need my help (basically, growing the number of subscribers to Measure Up).
We measure strategy and we measure the business model.
Ideally we have two main sets of important measures:
- Measures of the current strategy which will include corporate goals, and the goals they cascade into throughout the organisation
- Measures of the business model’s most important result, including the mission, customer outcomes, process outputs and in-process results
The most important set of measures is the strategy set. Call them what you will (KPIs, KSMs, strategic measures, whatever), but they matter more to the organisation right now. And, after they have done their job achieving the corporate goals, they may then become business model measures.
The business model measures are still important, but not as urgent. They’re either ticking along at an acceptable level, or their under performance doesn’t matter crucially right now. When their performance really does matter, they’ll be elevated to strategic measures.
It’s too overwhelming to build a complete set of business model measures in one fell swoop. So don’t bother setting up a project to attempt it. Instead, build the business model measures from the strategy measures, like I described above. Or, wait until process teams have the bandwidth to give time to it. Like this:
If teams don’t currently contribute to the organisation’s strategy, help them work on their impact in the business model.
When you have a team that just can’t see how their work directly impacts on the strategic goals, then don’t force-fit them. Instead, accept that their work isn’t something that is crucial to the strategy this time around. And then take the opportunity to help them flowchart and measure their part of the business model.
Their part might be a core process, a support process or just part of a process. If there is no direction yet to guide what they should be measuring, let them use their initiative to decide the few business model results that matter most to their internal or external customers, and focus on those.
If teams can’t find how they link to the organisation’s strategy, help them measure their impact in the business model instead. [tweet this]
Which of your organisation’s teams currently can’t figure out how they link to the strategy? Share this in the comments on the blog, and we can explore how they can focus instead on their impact in the business model.
“Strategy, according to Michael Porter, is about what not to do. It should be specifically focused, ruthlessly prioritised, and only about what needs to be improved.”
This reminds me of the anecdote from Warren Buffet about his “Not to Do List.”
I’m fascinated by your work, Stacey – as we’ve independently been coming to some very similar conclusions and processes.
I’m excited to have discovered you and look forward to reading your work.
I couldn’t agree more with the notion of separating out providing direction for both “business” and “strategy.”
I work in a state agency and the state’s organizational planning model has two types of plans: one aimed at mission (performance plan) and the other at change (strategic plan). Measures and targets are set in the performance plan to allow for clear objectives and guidance for operational aspects. Strategies and goals are set in the strategic plan to guide the key change initiatives identified as key to moving the organization forward.
A few years back, PMI put out a guide that discussed sorting the portfolio of work in an organization into the management of on-going operations and the managing of those projects and programs aimed at increasing capability.
The ideas appear so simple, yet get confused all the time. I sometimes refer to an organization’s need to manage both “performance” and “change.” The challenge is – how do you illustrate the differences and the need to focus when the word “strategy” has become synonymous with “important?” Who doesn’t want to feel their work is important?
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