Most employees now label the company strategy formulation workshops the “Corporate annual holiday” because nothing of significance comes out of most of these sessions. Strategy formulation during this time of the year has become a ritual. Executives take time to go and enjoy a few drinks away from demanding customers and employees. When they come back nothing changes despite discussions on issues that need implementation. Just check strategy documents for the past year and previous years; they all look the same. The only difference is the date when the strategy was formulated.
These are very difficult economic times; who survives and who goes under will largely depend on how executives are implementing the organisation’s strategies. The ability to gauge the performance of the organisation, and re-strategize real-time will give executives an opportunity to redirect their businesses to peak performance. Peak performance does not mean outstanding financial results. It means sustainable performance in key aspects of the business (financial, customer, people and internal process).
Measuring performance in accounting terms alone is misleading and dangerous. How often do you hear of companies performing above expectations financially and yet the following week they close shop? When companies are reporting their financial results they should devote the same space to indicators covering customers, people and internal process. Financial indicators alone will not show a complete picture of business performance; therefore executives need to revisit their priority list.
Strategy implementation should be at the top of every executive’s priority list. Strategy drives business. Here we are not talking about strategic planning. We are talking about executing your strategy. In this challenging economic environment, you cannot afford to hide the strategic documents in your drawers. The strategy should be a living document that your staff members can use on a daily basis. Problems and solutions will not by any chance meet and sort themselves out. You need to be proactive and drive the organisation’s strategy. Strategy is the CEO’s responsibility and the success or failure of the organisation’s strategy is their responsibility. In some organisations we have seen a senior manager being appointed to be in charge of strategy. Such structures rarely work as strategy needs to be driven by the CEO and the Board. Normally people appointed to be in charge of strategy implementation struggle for identity and are not given enough power to drive strategy implementation. Strategies will not be implemented as long as people are not held accountable.
Performance measurement and management is mission critical in this environment. A CEO should drive performance measurement and management. 90% of an Executive’s time should be occupied by strategy, performance measurement and management. Here we are talking about real performance measurement. Without a proper system of performance measurement and management, most organisations will remain on life support.
After devising the strategy for the organisation, the next step is to cascade it as part of the performance measurement system. Performance management is not what most organisations have in the form of appraisal forms which in most cases are divorced from the company strategy. When your strategy changes, your performance measurement system needs to reflect the same. As a company executive, check the indicators or measures that your organisation is using. Check if the measures can be influenced by the company’s strategy and if people can be rewarded based on the movement of the indicators. Is it something that gives you feedback? Your measures should be able to tell you whether you are winning or losing? If they can’t, look at them again. A larger percentage of measures fall under the financial perspective. Financial measures will tell you if you have won the game but will not be able to give you indications of future victories. Focus on customers, people and internal process is a sure way of ensuring future victory. Quick financial gains, characterized by shortcuts will lead to disaster.
Organisations cannot afford to keep on rewarding people without paying attention to the business performance. The only way to ensure organisations survive is by rewarding people based on performance. Here we are not talking about salary increases. Organisations must design incentives that will drive business performance. For your incentive scheme to yield the desired results, you need to have a performance measurement system that is credible. Staff members are tired of being penalised for things that they have little or no control over. Your incentive scheme should start by rewarding teams or workgroups before focusing on individual.
4. Building a strong team of executives
CEOs need to have a strong team that will ensure the company succeeds both in the short and long term and ensure the right people are selected and placed onto jobs. You should be able to hire for competency and attitude. There are a number of highly skilled individuals you can hire but will cause you sleepless nights because of their attitude. You can almost guarantee your organisation’s success by making sure you hire the right people. These will be easy to manage and not require constant supervision. Imagine having an organisation that has 50% slow learners. For you to succeed in such a situation you will have to invest heavily in training and supervision. A team of highly competent and willing individuals will make your job of delivering shareholder value easy.
5. Change Management
The ability to constantly change and renew the organisation will give you competitive advantage. Look at the systems that you are using (policies etc), and see if they are still relevant in the current economic environment. If they are not supporting the current strategy, why are you keeping them? Look at your current team; is it a team that can ensure victory for your organisation? If not, do something about it.
The ability to identify a problem and do something about it will separate winners from losers and the results will be there for everyone to see.
Memory Nguwi is the Managing Consultant of Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. Phone 481946-48/481950/2900276/2900966 or cell number 077 2356 361 or email: email@example.com or visit our website at www.ipcconsultants.com