Back to PWI Magazine - Summer 2011
Have you developed your ”Roadmap To Excellence”? Part 2 of 3
Last time , we covered the first 2 of the 6 silver bullets for achieving and sustaining organizational excellence that have been validated to drive high performance in today’s organizations…they were..
1) High performing, world class organizations focus on their customers (or “stakeholders,” if you prefer).
2) High performing, world class organizations have visionary leaders.
This time we will cover silver bullets 3 and 4…..
3) High performing, world class organizations plan for the future
4) High performing, world class organizations measure performance.
3) High performing, world class organizations plan for the future. They focus on their changing environment; systematically address strategic challenges; ensure adequate resources to accomplish key goals; and deploy, measure, and adjust plans as needed.
Consider these pain points:
Effective strategic planning is hard. About 70-90% of business strategies fail, which has a huge impact on organizational results.
- Decreased employee commitment, 67%
- Lost Market Opportunities, 53%
- Decreased Revenue, 53%
- Increased Costs, 39%
- Increased Cycle Times, 28%
- Decreased Customer Loyalty, 28%
- Lost Market Share, 28%.
Here are some best practices in strategic planning:
- Understand your environment – your strengths, weaknesses, opportunities, and threats in terms of changing market and customers needs, shifts in technology, competition, regulations, and risks.
- Identify your strategic challenges, strategic advantages (marketplace benefits that ensure future success), and core competencies (areas of expertise/strength that are difficult to imitate and create a sustainable competitive advantage). And then determine strategic objectives that address your challenges or leverage your advantages/competencies. Strategic objectives should be measurable, outcome-oriented results the organization must ACHIEVE to be successful in the future (they are NOT action plans). They should be challenging, but realistic.
- Develop action plans that align with strategic objectives. Action plans should include the details of resource commitments and time horizons for accomplishment. Deploy them throughout the organization, assigning ownership and accountability for completion.
- Involve all key stakeholders in the development of your plans. It increases buy-in, develops stronger plans, and assists in ownership for implementation.
- Determine resources (human, financial/budget) AFTER you establish direction (most organizations do it the other way around). This way you create a strong, aligned organization based on the strategic-operational priorities.
- Track the achievement and effectiveness of action plans, and adjust plans as environmental factors dictate. Project your organization’s performance as well as your competitors (so as to see a path forward and to have milestones that facilitate adjustments when plans are not on track).
There are many effective planning processes (Hoshin Planning, large-scale change, catch-ball techniques, balance scorecard, and many others). But the key is to understand your environment; set strategy to address challenges and leverage advantages; and deploy, measure, and adjust plans. The role of measurement is key….
4) High performing, world class organizations measure performance. You cannot manage what you do not understand, and you cannot understand what you do not measure. High performing organizations are data-driven. They rely on facts to make decisions (rather than intuition), and they systematically manage their information, knowledge, and technology.
Here are some best practices in measurement:
- Use data and information to track daily operations and also for tracking overall organizational performance. In other words, seek a balance of leading and lagging indicators that monitor progress toward strategy and also enable the management and improvement of key work systems and processes.
- Occasionally review the data you NO LONGER need, and consider “sunsetting” or discontinuing its collection and use.
- Use comparative data to support decision making and innovation. Why? Comparative data and benchmarks help you determine relative performance – how your organization compares to the average, to upper quartile performers, to best-in-class. It also helps set targets and promotes innovation.
- Systematically review and analyze performance to promote continuous and breakthrough improvement and to promote innovation. This review, analysis, and action should take place throughout your organization (and in some cases, to your supply chain and partners). Frameworks like the Balanced Scorecard (or dashboards) are excellent in helping leaders and employees quickly analyze performance and take action as needed.
- Ensure data accuracy, integrity, reliability, timeliness, security, and confidentiality throughout the organization. Make data available to all parties that need it (workforce, suppliers, partners, customers, etc.) to make decisions.
- Manage organizational knowledge, transferring knowledge within your workforce, between your workforce and suppliers/partners/customers, and from departing employees. Identify, share, transfer, and implement best practices across your organization.
- Ensure hardware and software are reliable, secure, user-friendly, and that information is available during emergencies.
Good organizations need the data to see how they are performing and one key area is measurement of core business processes
Stay tuned, next time we will cover this in the last bullets 5 and 6, continuing to develop our roadmap to excellence!
Stay tuned, next time we will cover bullets 5 and 6, continuing to develop our roadmap to excellence