Building Business Value | Corporate Management Strategies

The Two Critical Elements of Strategy

You've come up with a new strategy as a result of your most recent off-site meeting. Great!

Now how are you going to get the word out to your one thousand employees? Are you getting posters designed to illustrate your new mission, vision, or purpose? Are you stuffing paycheck envelopes with a document listing the five new goals of the organization?  Are you creating FAQs for your mid level leaders so they can play an active part in rolling out your new strategy?

Well, the sad truth is, most midmarket companies don't take these actions. If they establish a new strategy,  it's often rather complicated and the CEO fails to share it with others; for some reason, they keep it a secret!  Other times, a CEO does try to get the word out but does so in a way that the Reverend Bill Hybels of Willow Creek Community Church calls the "Mt. Sinai approach." He came up with this phrase because Moses came down from Mt. Sinai with the two tablets denoting the Ten Commandments and demanded that they be followed. That top-down approach might have worked for Moses, but it doesn't work in today's business climate!

Well-defined

Your strategy needs to be well-defined; crystal clear.  The CEO and everyone down the line has to be able to talk about the strategy with clarity.  Ambiguous strategies have cracks and these cracks lead to a diversity of opinion when it comes to execution.  Many midmarket companies that are top heavy in their leadership fall into this trap.  A CEO may think she is clearly outlining the strategy, but when it comes to implementation, the next generation of leaders are filling in these cracks of ambiguity with their own answers.  This rarely leads to a cohesive strategy implementation.

Clearly Communicated - Persistent and Consistent

If you don't go home sick and tired of communicating, you haven't done it enough!

That has to be your mantra when rolling out a new or varied strategy.  You've heard all the numbers on how long it takes to break a habit.  It's either 21 days or 17 times or something like that.  The point to remember is that you have to be both persistent and consistent.  Find as many ways as possible to talk about your new direction, your new strategy.  Make sure your senior leaders and next generation leaders really understand the strategy and its implications.  Use emails, tweets, facebook, posters in the cafeteria, ads, video clips from the CEO, newsletters, face to face meetings.  Use every old and new communications device at your disposal.

Executives in midrange companies often don't take the time to excite, coach, cajole, and mentor their stakeholders and their employees with regard to new strategies. They fail to do so at their peril.

Leading Corporate Change - The Soul

Last in a series on corporate change.

The underpinning of the mind and body is the soul, the culture of an organization.  A corporate soul that informs both the mind and the body is the corporate culture - what is accepted as normal behavior in an organization, a kind of code of ethics. Any change strategy should specifically deal with the major elements and nuances of  the soul or culture of an organization.

Are you cultured?

Culture consists of the norms of the organization. Though many may think their workplace lacks a culture, it is crucial to remember that every organization has a culture. It may be an adventurous and risk embracing culture like exists at Odyssey Marine Exploration or a team oriented culture like Whole Foods or it can be a low initiative, high accountability and bureaucratic culture such as  .... (you fill in the blank). Whatever the particular culture is, it is defined by a series of norms and behaviors, a code of what is accepted and not accepted. A culture is the glue of the organization. It holds things together when other things fall apart at the leadership or process level.

Creating a ‘Line of Sight'

An effective culture comes from a sense of shared ownership, which comes out of the shared sense of an organization's vision and operations, a "line of sight" between what happens day to day and the general performance of the organization. Such a "line of sight" leads to a sense that people's contributions are valued by the organization, an ownership culture in which everything is important to the bottom line. There is a great value to creating this ownership culture because the organization becomes comfortable with change and ambiguity - the only constant in business today.  Everyone should be thinking like an entrepreneur, a mindset in which what is good for the organization is good for the individual contributors.

Make your Values Public

There are useful methods and techniques for assessing the soul of the organization, and once this code of values, norms and ethics is established, it should be publicized. Most organizations should have their values posted. This justifies tough decisions, because such decisions - over hiring and firing, for instance - can be persuasively articulated when they can be connected with the organization's value system. In most organizations, the code of behavior - issues like lateness and timeliness, dress, and approach to customers - is left largely unspoken. This can pose a challenge when you're in the midst of a large change effort because there is no true north to point.

It's critical that important aspects of the culture be clear and documented.  Make sure that new people are brought into the organization in accordance with this code. It can even be used as a selling point, attesting to an organization's commitment to its customers and employees.

Documenting and then leveraging these unspoken codes will provide you the opportunity to use your corporate soul, your corporate culture, as an ally in the battle of corporate change.

Leading Corporate Change - The Body

Third in a series on change leadership.

Remember those three rocks held together by a rubber band? The rocks represent the mind, body, and soul, respectively, of an organization. All three must move in the same direction and at the same time, or suffer the consequence ... the rubber band snapping back and stymieing progress. Then you're back in that awful situation of looking at the same business challenges but with the added burden of a failed initiative in your rear view mirror.

The Body

When you think about the "body" of an organization, it is important to remember the image of the three rocks held together by that rubber band. If the three rocks don't move together, they will certainly not be able to move separately. An organization's body is its processes and structure, the core processes the company needs to work well. These can range from account management, to product development, to supply chain management to inventory control to sales turnover to professional services delivery. These processes must be looked at critically - just as the organization's leadership is analyzed - to make sure that they can handle the extra pressure of change.

What are your Key Processes?

Fred Wiersema and Michael Treacy wrote "The Discipline of Market Leaders" in 1997 and the basis of the book still hold true.  Know what  kind of company you are.  Is it critical that you are world class in customer service?  Is it critical that you are a market leader in innovation and research?  Is your success dependent on being operationally efficient?  Understand what processes are key to your success and focus on being world class in those.

If it ain't broke ... break it!

Where are the black holes in your organization? Where is value being drained from your company because you are slow to market, late in your deliverables, unaware of your target market needs and wants.  A trend I keep running into recently is lack of governance.  Some organizations have such poor governance and insight on how their key corporate processes support their business operations, that by the time they realize they are in trouble, it is already too late.

A check up from the neck up on your structure.

Are the organization's structures aligned with the vision for the organization's growth and future? It may well be that business transformation and re-engineering may be necessary to support the change, and it is crucial that these determinations are made early in the process.  When changing the processes of an organization, it is also important to align those processes with one another (in keeping with the image, the little pebbles within the rocks must be held together, just as the big rocks are held to each other).

Reorganization is not the only thing that is important to changing the body of the organization. The elements within the organization may be fine, but their alignment may be problematic. In that case, it is important to realign things appropriately to ensure that the processes will not be overwhelmed by change. These realignment plans should take a collaborative approach. This kind of change is not about one person imposing swift changes, but is about the organization itself making the change. Outside help can manage or facilitate the process, but it should not impose solutions. Internal input should be maximized.

We'll wrap up this series and tie everything together with our next conversation on the soul of an organization - corporate culture.

3 Tips For Leading Change

Second in a series on Change Leadership

Thomas Jefferson said the "dispositions of the mind, like limbs of the body, acquire strength by exercise."  The "mind" of an organization is its leadership. And leadership is defined as those making decisions, including but not limited to those "in charge" of the organization. There is leadership, in other words, at all levels of an organization. Leaders of an organization are the ones who are setting strategy, articulating vision and direction. But they are also the ones that are making tactical decisions while executing the strategy.  To paraphrase our learned friend TJ .... "if we don't exercise our mind (our leadership), it will atrophy and become useless."

Make an Honest Assessment of your Current Situation

In moving the mind of the organization forward, the first thing to consider is the leadership. The first step in this kind of growth is a critical skills assessment of the leadership itself. It is important that this assessment be more general and all-encompassing than some kinds of superficial assessments you might have experienced. Some sort of team-based assessment, called a 360 degree assessment, is probably advisable. A 360 degree assessment is an evaluation of leadership capabilities. A good tool will address all the classic leadership attributes, from establishing a vision to setting direction to motivating and inspiring. A thorough leadership assessment also assesses classic management skills like controlling, monitoring and directing. A 360 degree assessment shows the level of functioning of both a leader and that leader's circle of influence.

I happen to be a fan of the "Leadership Practices Inventory" tool developed by James M. Kouzes and Barry Z. Posner, authors of the best-selling book, The Leadership Challenge.  But there are a number of good tools available in the market.

Everyone who is influenced by you is part of the assessment, from supervisors to coworkers to subordinates. It may very well be that a leader is good at certain parts of leadership - say, the intellectual/financial side - but lacks certain key qualities of emotion or vision. A 360 degree assessment allows for both strengths and weaknesses to be highlighted.

Who Participates in the 360?

Everyone in your leadership group!  The goal for any change or transformational initiative is not just for one person to have the skills to move forward, but for the entire leadership group as a whole to have those skills. A full evaluation and assessment can have both major and minor consequences; new employees may be required to compensate for weak skills in the group, or perhaps new training of existing employees. The most important part of an organization's growth is the advancement of the mind, though it cannot happen without the simultaneous growth in the body and soul.

When do I know it's working?

Assessment is generally very successful if it is approached enthusiastically by an organization.  The CEO or someone with a traditional leadership role in the organization being an avid supporter.   It can be tied to new planning initiatives and a professional development initiative. And it's important to remember that the identification of strong skills is just as important as the identification of weaknesses. Strengths, after all, will be your leverage points. But the assessment of all these aspects is the most important thing, and is crucial to preparing for growth.

Make Leadership Development Ubiquitous

As mentioned above, it is important that "leadership" not be a quality only perceived as residing in a few individuals at the top of an organization. Change is easier and more effective when sound business decision making exists throughout the organization. It's useful to teach everyone in the organization about the organization; when everyone knows how the business works, everyone understands their role in the business' success and, with reason, thinks that their work is integral to that success. Leadership, then, becomes ubiquitous in the organization. If lower levels of management know how everything impacts the bottom line, it will be easy to make them aware of how to be more productive and cost-effective. This form of transparency can be a huge benefit for the organization, especially when a change initiative is seeking to change deep-seated ways of doing things.

Driving the Big Points Home

Executives can make this sharing of knowledge easier for other members of the organization. It can be as simple as anecdotal, everyday stories which make it easier to understand how the organization works and how individual employees' work has an impact on an organization. It's important not to use complicated business terms like "return on investment capital"; a key line to remember in this context is "turning Wall Street into Main Street." It's not just the content of a message that is important, but its medium. Rather than a serious, somber message, often the more humorous or accessible information is more effective. In general, though, however they go about it, executives should drive home every day sick and tired of articulating the organization's vision, direction and objectives. If they're not, they're not doing it enough.

3 Tips for Leading Corporate Change

First in a series on Change Leadership

Machiavelli said "there is nothing more difficult to take in hand, more perilous, or more uncertain in its success, than to take the lead in the introduction of a new order of things."  Smart man that Machiavelli!  If you've been in a leadership position for more than five minutes, you know how true this is.

A useful way to think of strategies for effective organizational change is the image of three rocks held together by a rubber band. The rocks represent the mind, body, and soul, respectively, of an organization. All three must move forward at the same time, or else the rubber band will snap back, stymieing progress and leaving you, at best, in the same position as when you started the change initiative.

The "mind" of an organization is its leadership. The leadership is defined as those making decisions, including but not limited to those "in charge" of the organization. There is leadership, in other words, at all levels of an organization. Leaders are the ones who are setting strategy and articulating a vision and direction.

The "body" of an organization consists of the key components of the organization-the processes, the structure, and even the finances of the organization. The body represents the moving parts of an organization.

The "soul" of an organization, informing both the mind and the body, is the corporate culture-what is accepted in an organization, a kind of code of ethics.

Any growth strategy has to move all three of these elements in unison (or close to it) if it is to be successful in the long run.

Keeping in mind the metaphor of the rocks held together by a rubber band is a simple way to think of change leadership.  It is also a reminder of the challenges of leading a successful change effort.  Every transformational initiative represents change and since change is the only constant in business, learning to effectively lead the change is the only way to ensure survival.

7 Questions to Test the Level of Initiative in Your Company

Strategic Plans are only useful if they are well executed.  Transformational Initiatives, the implementation tool for building business value, suffer the same consequences.  You may question whether your company or business area has a culture of execution, but to get things off the ground, you're going to have to determine if you have a culture of High Initiative.

Initiative falls into that category of hard to define but you know it when you see it.  High initiative environments buzz with energy.  Focus groups kick off to study a new market-segmentation strategy.  Pilot teams review compensation alternatives.  Individual employees take action whenever something needs immediate attention.  Transformational Initiatives get moving right away.

In high initiative environments, projects take place simultaneously.  This is not to say they are well coordinated or aligned with the direction of the company, but the overwhelming urge on the part of employees to be a part of something, no matter how small, leads them to volunteer and share their valuable time.

Is initiative present in your organization?  Here's a quick self-test:

1. Do employees take action immediately when faced with non-routine issues that require attention? 

2. Is most of the staff committed to growing professionally, personally and technically? 

3. Does the staff feel that leadership is committed to a growth pattern that will create opportunities?

4. Does your organization normally discuss failures and look for ways to improve?

5. Does it seem like things are never finished?

6. Does the company spend more time discussing how to grow revenue rather than how to cut costs?

7. Do employees generally just "make things happen" and keep everyone informed on how it went?

The more times you answered "yes," the more initiative your organization shows.  The higher your corporate initiative, the better your chances for getting big transformational changes off the ground.

14 Ways to Keep your Corporate Initiatives Moving

Your transformational initiatives (TIs) are now moving forward. But are they going to succeed or will the entire process wither as many flavor-of-the-month corporate initiatives do?

If you're the CEO, the business owner, or the leader of the organization by any title, the fates of the TIs are up to you. This is where a lot of leaders falter-they've established the TIs, they've put people in place to run them, and they've got great goals. But they lack follow-through. No one keeps the commitments. This leads to an enormous amount of frustration, and it's when off-site euphoria turns into "fire the consultant." So how do you prevent this kind of unfortunate situation?

Leading Change

John Kotter published "The Heart of Change: Real-Life Stories of How People Change Their Organizations" with Harvard Business School Press in 2002 in which he talked about the need to:
   1. create a sense of urgency,
   2. develop a team to guide change,
   3. clearly communicate the vision,
   4. knock down obstacles,and
   5. create and publicize short-term wins.

Speed Brakes

Robert H. Miles, co-authored the book "Big Ideas to Big Results" with the Financial Times Press in 2008 where he talked about the six speed brakes on your company initiatives as:
   1. cautious management,
   2. business-as-usual management practices,
   3. initiative gridlock,
   4. recalcitrant executives,
   5. disengaged employees and
   6. loss of focus during execution.

Keep the Momentum Going

Three more steps to consider when your transformational initiatives start to loose steam:

First, it's essential to review TIs on a regular basis. You've got to be diligent about receiving regular reports, be they weekly, bi- weekly, or monthly. It's up to you to make sure that your people stay focused on the TIs with which they have been tasked. If they don't sense a continuing urgency from the top, they'll find other actions with which to occupy their time-crisis management, their own initiatives, or just simply returning e-mail and running in place. Your diligence must be manifested in terms of expecting or demanding regular reports, so you know what exactly is going on. The reports should contain information about schedules, milestones, returns on investments, roadblocks, outcomes, outputs, wins and opportunities.

Second, it's important to recognize that TIs are invariably related. There will be inevitable conflicts with regard to resources. Perhaps one of your TIs calls for a change in packaging, and that in turn requires a new agreement with a sourcing company. Another of your TIs has targeted subcontracts management as a problem area and has decided to change the way all vendors are managed, so renegotiation of contracts is not possible with your sourcing company right now. You've got to play referee, and you've got to be able to make decisions, if not on the fly, then fairly quickly. That's because momentum is key to ensuring the health and success of a transformational initiative.

The third key involves managing the various stakeholders inside and outside of your business.  Folks that really know their stakeholders are lobbyists.  You may not have fond thought of lobbyists, but if you've ever seen a good one in action, its akin to watching the plate balancers from the old Ed Sullivan Show (ancient pop culture reference) perform on stage.  They know just what resources are required, who needs attention and when to spin another.  Sounds like corporate change to me!  Leaders working toward change, and aren't we all, should keep the metaphor of the plate spinner in mind while keeping in mind the ultimate reason for the initiative!

You Can Only Choose Three

I agree with Warren Bennis, one of our great business scholars, when he says "Leadership is the ability to translate vision into reality."  You've been working on your company's direction and strategy.  You've done a good job of taking an honest assessment of your current situation and you've also painted a vibrant picture of the future.  Now it's time to complete the gap analysis and create a list of potential transformational initiatives.  You and your leadership team have to buckle down and make some hard decisions. It's time to take action and build toward your vision of the future.

Let me warn you however, that the choices get harder because now you have to pick only three.  Just three transformational initiatives out of the myriad of options you uncovered during your planning session.  These will be the three changes that will really drive value going forward.

The Rule of Three

Why choose only three TIs? Why not choose seven, eight, or ten? Why not just work off the candidate TIs and call it a day? There are two reasons why you should only choose three.

First, the biggest problem for many midmarket companies is a lack of focus. Many midmarket executives have so many things on their plate that they don't know where to start. If you and your team pick just three and focus on those three main initiatives, your probability of completing each and subsequently adding real value to your company goes through the roof. If you choose seven to ten initiatives, chances are that a year from now you'll still be working on the same seven or ten incomplete initiatives.

The other reason is a bit more esoteric. One of the tricks of effective communications is the "rule of three." You've heard it all your life: Life, liberty and the pursuit of happiness. Mind, body, and soul.  The Father, Son, and Holy Spirit. In fact, your mother probably used your first, middle, and last name when she had a TI she wanted you to work on!

As a leader, your job is to constantly talk up your three initiatives. Having just three will allow you, your team, and the entire company to focus on specific tasks, and it will help you create a shared vision for your company.

When considering which TIs to choose, start with this question:

Will it actually add value to the organization?

It's easy to get so caught up in the exercise that you forget the desired end result - adding value to the company.  So don't lose sight of what this work is all about - choosing the right TIs.  Think of a funnel. All of the potential candidate TIs go in, and the only three that come out are the ones that will add real business value.

The Power of Assuming a Noble Intent

Guest Blog by Fran Landolf

Fran Landolf is a speaker, author, friend and former Federal senior executive.  He advises business and government on technology strategy, change management, executive coaching and leadership development. His values based perspective on leadership is time tested and perfect for today's fast paced workplace.  Check out his book,  "Noble Intent" for a refresher course on finding the best in those you work with.  Fran and his wife live in Baltimore and is particularly proud of his two grown children and five still growing grandchildren.

We can all identify truly noble work. Mother Theresa and Professor Muhammad Yunus of the Grameen Bank are people whose work would receive widespread acclaim for having noble purpose and leading to the improvement of the lives of millions of people. But for most of us, we see only the results of work performed by millions of anonymous people who supply what we want and need every day. This labor has a purpose and whether that labor is plied in the public or private sector, in most cases, public good is an intended outcome.

Focusing on Outcomes

It is safe to assume that most people approach their work with the intent of doing a good job.  Generally, when people focus on the outcome of their work rather than the performance of their duties, the results are of a higher standard.  Focusing on the outcome means working with noble intent. Perhaps in today's vernacular, we would say that they are "customer focused", but in the end it is behavior resulting from wisdom and not their interpretation of "job responsibilities" that drives them.

The First Step

One of the best ways of getting people to work with noble intent is to assume that they are working with noble intent. It is one of the most powerful assumptions we can make for changing culture at work and at home. But assuming noble intent does not come naturally. When we observe substandard behavior or work, natural instincts dictate that our disappointment is the consequence of lack of ability or conscious failings. This attitude is so much a part of our make-up, it has a name: actor-observer bias (a form of fundamental attribution error). However, we possess a powerful tool to change behavior and consequently change outcomes.

Challenging Your Instincts

We can assume noble intent in situations where our perceptions might naturally have us assume otherwise. Recognizing that reality is often at odds with our perceptions, the simple act of assuming that people generally want to do the right thing for the right reasons alters our approach and leads to improvements in concert with our assumptions.

Balancing Act

We recognize that some people just behave badly or don't have the skills needed to perform their work successfully. We see passive aggressiveness, malicious compliance and other forms of behavior destructive to personal & professional relationships that manifest themselves in mission outcomes and the bottom line. They must be addressed by strong, decisive leadership. But, given the odds that most people do indeed approach their work with noble intent, it is worth our effort to assume it.