It’s often easier to cascade the corporate strategy to customer-facing functions than it is to cascade strategy to support functions. That’s because we make a common mistake that’s based on a false assumption about how support functions align to strategy.

Imagine you have a corporate goal to increase customer loyalty. It’s relatively easy to understand how customer-facing functions can influence this goals:

• If the customer service function is more helpful and friendly and respectful with customers, loyalty can improve.
• If the sales function gets better at matching the right products or services to each customer’s real needs, loyalty can improve.

Because these functions interact directly with customers, they can directly influence goals to do with customers.

But it’s harder to see how support functions, or back-office functions, impact on a corporate goal to increase customer loyalty. And it’s not sensible to say ‘oh, well they should focus on their internal customer loyalty…’ That’s an example of fragmenting strategy, not cascading it.

The mistake we make in cascading strategy into support functions is to try and align them directly with corporate goals. The assumption is that they can have a strong direct cause-effect link to strategy.

It’s a bad assumption, because the support functions exist to serve the customer-facing functions. They don’t exist to directly serve the corporate direction.

So support functions have a direct cause-effect link to the other customer-facing functions:

• The IT function directly impacts the sales function by how quickly they can provide easy access to accurate customer records and purchasing history, to inform the sales team’s campaigns.
• The HR function directly impacts service delivery functions by how quickly they can recruit people into vacant positions, and by how closely the applicants match the skills and attitudes and knowledge the service delivery function needs.

So more often than not, strategy is cascaded to support functions via the customer facing functions. We still get alignment of support function goals to the corporate goals, but the alignment is discovered by first aligning support functions with the customer-facing functions.

Support functions can follow these steps to figure out what goals and KPIs they need, to ultimately align with the corporate goals:

1. Who are our internal customers?
2. What goals do our internal customers have, and how do they align to the corporate goals?
3. How do we help or hinder our internal customers to achieve their goals?
4. Therefore, what are the results our internal customers need us to improve or excel at?

Sometimes a support function can have a direct impact on a corporate goal:

• The procurement function can directly impact, through their purchasing policies and processes, a corporate goal of reducing expenditure.
• The HR function can directly impact, through recruitment and staff development processes, a corporate goal of increasing employee engagement.

But more often than not, the greatest impact support functions have on corporate success is in how well they support the customer-facing functions in carrying out the organisation’s purpose.

 

DISCUSSION:

How does your organisation align support functions’ goals and KPIs with corporate strategy?