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LEADING Your Business FORWARD
Aligning Goals, People, and Systems for Sustainable Success
By JOHN PYECHA, SHANE YOUNT, SETH DAVIES, ANNA VERSTEEG
The McGraw-Hill Companies, Inc.Copyright © 2013 Competitive Solutions, Inc.
All rights reserved.
What's the Status of Your Goals?
Vacations are a time to let go of all worries and stresses. To get away from it all, some people just get in the car, turn on the ignition, and leave their cares behind. They make no plans; they travel where the road takes them. Their vacations are spontaneous and adventuresome.
When these same people take a business trip, however, it's another story. They abandon spontaneity. When they have a meeting set up with an important client, they make sure they get to their appointment on time. They plan the trip down to the last detail, allowing for contingencies. When they get into their car, they plug in their GPS and—after the GPS acquires their current location—set their destination, and take off, confident to arrive at their meeting place on time.
Our work throughout the last 20 years has taken us into the depths of all types of organizations. We have learned through observation, surveys, and other studies that organizations meriting the descriptor "high-performing" share three essential components. Not coincidentally the three components shared by all high-performing organizations—goals, people, and systems—are the three "satellites" in Leading Your Business Forward: Aligning Goals, People, and Systems for Sustainable Success.
Goals—the first of three GPS "satellites"—sets the direction as well as the destination for high performance. Let's look at how these successful organizations differentiate themselves from all others through their goal- setting processes.
Everyone "knows" that goals having a clearly defined vision, mission, and strategic direction are essential to business operations. What is often missing, however, is how to link tactical operational goals to the strategic direction. Goal setting has been a staple of business operations for decades. Unfortunately, however, goal setting in itself is not a panacea to an ailing organization. Goals are great, but unless goals are established with a business focus, and everyone has a clear understanding of them, accepts accountability for achieving them, and pursues them with a sense of urgency, goals are just sentences written on a piece of paper. Consider this example:
A well-kept secret
A number of years ago, the vice president of human resources at a diversified, midsized manufacturing company saw a problem: Top management at both the corporate and the division levels was "graying," but the company had no plan in place to groom individuals to take over leadership positions in the organization. What would happen if the company experienced an exodus of executives to retirement, which could potentially happen within just a few years?
The VP decided something had to be done, and he presented the idea of developing a succession plan to the company's president. After receiving an OK, the HR department undertook the succession-planning task by identifying success factors for each of the key positions, selecting possible candidates to fill slots, and listing the types of experience and training candidates would need to become qualified to take on advanced leadership responsibilities.
The succession-planning project took months of concentrated effort to complete. When the results were compiled in a confidential report, the VP presented it to the president, who said it looked like a fine plan and told the VP of HR his department should update it annually. The VP of HR took the task to heart and developed candidates to succeed him when he retired.
When the VP of HR did retire some years later, his successor (who had been groomed according to plan) found a copy of the succession plan. As she visited with each of the company's top leaders, she included it on her agenda for discussion. She would ask, "According to the succession plan, I see that your goal is to develop [names] as potential candidates to take over for you when you retire. How are they being prepared for future responsibilities?"
She was shocked to hear the same response from each of her internal clients: "We have succession-planning goals? I didn't know that. I didn't know I needed to do anything."
The new HR executive learned that, although the succession plan looked good on paper, it had been developed without the input of those it affected. As a result, no one had committed to it, and the company was essentially at the same place it had been when the concept of succession planning had first been discussed. The succession plan had been a well-kept secret.
We have found that in high-performing organizations, everyone in the organization—from the president down to the janitor—has a robust and thorough understanding of whether the organization is winning or losing. They have this understanding, because of the following:
Goal setting is not an annual exercise taken lightly. It is a serious process shared by everyone in the organization.
The organization's goals are crystal clear to everyone.
The organization's goals are business focused, with measureable business results.
The metrics that depict where the organization stands relative to its goals are easy to use and grasp.
The organization's systems allow and encourage each team member and every team to influence goal attainment.
Everyone works with a sense of accountability and urgency to meet these goals.
In high-performing organizations, goals are not abstract; they are relevant to the overall organization as well as to the various teams and individuals on those teams. This is because goals are developed systematically, using information that comes from the bottom up as well as the top down. They are always business focused.
A consumer-products company in North Carolina does something that could be held up as a best practice: Every Monday morning when team members come to work, they see 32 pieces of paper posted in the foyer of the employee entrance. The top piece of paper gives the status of the company—where it is to date in meeting its goals. The other papers depict each team's contributions to meeting their goals. Everyone knows if the company is winning or losing by virtue of broadcasting its status and the status of each team through the use of a business scorecard built on business-focused goals.
Something else that happens, however, is just as important: If the company is missing a goal, team members can see the scorecards of every other team. They know which team is meeting (or exceeding) goals, and which teams are missing them. The scorecards and their public display create accountability for everyone to work together for mutual success.
How do high-performing organizations achieve this level of goal setting? Their secret is to track progress toward goal achievement systematically through business-focused scorecards. Scorecards are one of the systems our leadership GPS system uses to align goals throughout the organization. (More on using business-focused scorecards later.)
Business-focused scorecards are system tools that educate, facilitate, and motivate as follows:
Educate. Because scorecards are developed around a set of key business areas (such as quality, safety, cost, productivity, people, and customer service), they create a common language that everyone in the organization learns and uses. Additionally, because team members participate in building and reporting on their scorecards, they gain a greater understanding of what metrics are, how they are linked to the organization's strategy, and what behaviors and factors affect performance both positively and negatively. The result: Even an associate at the lowest level of the organization can look at the corporate scorecard and understand what it says.
Facilitate. Weekly meetings in high-performing organizations are focused around the business scorecard, with teams discussing what went well during the last week and what did not go so well—and the corrective actions they need to take to get back on course.
Motivate. Teams develop their own goals, objectives, and corrective action plans in support of the corporate goals. They relish their accountability to achieve and take pride in celebrating when goals reach the "green" state.
Business-focused scorecards used in high-performing organizations are not mere thermometers that tell at a glance if an organization is winning or losing. Rather, scorecards in these organizations are thermostats. The difference between a thermometer and a thermostat? A thermometer is static and only tells "what is." In contrast, a thermostat not only tells us the current temperature, it adjusts itself to bring the temperature up or down to the desired level! High-performing organizations use their business-focused scorecards as thermostats—always adjusting for optimal output.
When business-focused scorecards are used as thermostats, people feel connected to their jobs and the organization. The scorecards are the critical link to engagement. And engagement is critical to sustained success.
In the true anecdote, "A well-kept secret," the company could easily have made inroads on achieving its succession-planning goals by including the department managers in the goal-development process. And the written goals should have been specific, measurable, achievable, relevant (business-focused), and timely (SMART) for each department. (More on this in Chapter 8.) Most importantly, the goals could have been achieved if everyone in the organization had been accountable to achieve them.
Common sense says you can't get to where you want to go unless you know your starting place. In the business world, you can't know if you are winning or losing without knowing your starting status. So the first "satellite" the leadership GPS process "acquires" is getting a fix on the organization's goals, as they currently stand—as measured against those that are known to be high performers.
How Engaged Are Your People?
The second "satellite" that leadership GPS "acquires" is people.
A phenomenon we have observed in high-performing organizations is noteworthy: The people in these organizations—at all levels—are motivated. They work with urgency, accountability, and a true sense of direction. They want to do a good job, and because their goals (as well as the organization's) are clearly spelled out, they know if they are doing a good job or if they are missing the mark. (And if they are missing the mark, they take steps to get back on track.) There's no guesswork involved in assessing their performance.
In one word, the team members in these organizations are engaged.
A Broken Engagement
Tom, a typical first-line leader in a manufacturing plant, has 15 team members under his supervision. Like so many other supervisors, he has a lot on his plate, but he feels fortunate that he can depend on three of his top performers whenever he gets in a bind. Whenever the department falls behind on its productivity or quality, or if a special project comes down, he asks these three individuals to pitch in.
Tom has noticed, however, that in the last couple of months, these three top performers have seemed reluctant to do "more." They say "yes" to a project, then take their time on getting it done. Tom wonders what is going on. His "stars" aren't shining any more brightly than any of the other team members. They don't volunteer, and their energy level has declined. Worse, yet, now that the economy has picked up and jobs are more plentiful, one of these individuals said she was updating her résumé.
What Does Engagement Look Like?
We define "engagement" as associates who are completely involved in their work. They have an emotional as well as an intellectual attachment to their organization, their coworkers, and the work they perform. Their interest level and desire to do well at work go beyond mere enthusiasm. They can be likened to having a passion to do "right."
Engaged associates take deliberate, demonstrative actions to get the job done on time and with purpose, knowing that what they are doing contributes to the employer's success. And they can tell you if the company is winning or losing. They participate in order to advance the business.
A few years ago, a popular buzzword flitting around the corporate world was "empowerment." To empower employees is to give them the tools and authority to do the job. No doubt about it: Empowerment is desirable and good; but empowerment has to be done right. Unless team members are engaged at the same time they are empowered, little will occur. You will just have unproductive employees who have tools and authority but no commitment to contribute.
At the height of the "empowerment frenzy," many employers hastened to put into place programs that resulted in making employees feel good about working for the organization. This type of empowerment is not engagement. Engagement is not about making people happy or creating a great place to work. That's not to say the work environment should be unfriendly and cold. Of course you want team members to brag about where they work! But engagement is more than that. Engagement is about bringing people together with a unity of business purpose and holding them accountable to helping the organization achieve its goals.
What causes people to become engaged (and as a consequence, to use their empowerment)? Our studies in high-performing organizations show that associates become engaged when they
are consistently held accountable,
are business-focused, and
are led by process-based leaders.
When these three things are integrated and occur concurrently, not only do employees become engaged team members and associates, the business succeeds. Feelings are important, but they don't create success. Actions that move the business forward make the organization succeed.
Don't be mistaken: There is a correlation between feeling and doing. When associates within an organization feel there are specific actions and behaviors expected of them and when those actions and behaviors are framed in the context of doing, engagement evolves—engagement that integrates accomplishment and emotional satisfaction.
Engagement is not an elusive, indescribable, and immeasurable quality. Having studied its characteristics extensively, we have identified eight tenets that thoroughly define engagement, described in behavioral terms. Team members who are engaged
1. demonstrate business acumen,
2. use continuous improvement tools,
3. show accountability through actions,
4. take ownership for personal development,
5. demonstrate altruistic decision making,
6. perform collaborative mentoring and coaching,
7. are passionately self-motivated, and
8. demonstrate positive affirmation.
Do You Have Leadership Systems in Place?
Gabby—our car's GPS—needs to acquire signals from at least four satellites to get precise bearings of latitude, longitude, and altitude. Those signals tell her where she is, so that she can calculate how to get to where we want to go.
Leadership GPS needs to acquire the leadership locations from three "satellites": goals, people, and systems.
The Merriam-Webster dictionary defines "system" as "a regularly interacting or interdependent group of items forming a unified whole." The key words are interacting and interdependent. When several leadership systems interact and become interdependent, high-performance organizations that function with clarity, connectivity, and consistency result.
What are the systems that yield clarity, connectivity, and consistency? We have alluded to them in the previous two chapters:
A Business Scorecard system
An Accountability system
A Communication system
We can't truly appreciate fully how these three systems work together to sustain business success until we understand how organizations traditionally (mal)function because they don't have these systems in place.
Managing by the 3 Ps
Leaders in today's complex economy are faced with a multitude of challenges, many of which you can relate to—acting as a coach, mentor, facilitator, mediator, educator, scheduler, HR person, and motivator, to name a few roles. They are asked to do more with less and yet motivate their teams to meet the organization's mission and goals. Today's leaders are pulled in so many directions that they are pulled away from their associates—the people with whom they should be most connected. Is it no wonder, then, that associates feel disengaged, since their leaders do not have time for them?
Excerpted from LEADING Your Business FORWARD by JOHN PYECHA. Copyright © 2013 by Competitive Solutions, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
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