Are you unwittingly herding sacred cows?

Sacred cows are areas within organizational processes, products or almost anything that everyone knows are off-limits, and that people can’t get at to create change. What makes them hard to find is that they’re usually only identifiable by people who aren’t in the upper echelons. The reason for this is simple: those in control can’t see them, because they’re often the ones creating or protecting them (or are perceived to be).

Here’s where it gets tricky: The real issue isn’t whether these “cows” can actually be CHANGED, it’s whether people PERCEIVE that they can be CHALLENGED. The term “sacred cow” never comes out until it’s referenced within the context of someone unsuccessfully being able to change something, but are told either directly or through the grapevine that it’s “hands off.” This perception can create stagnancy in these areas of the organization, halting what would otherwise be normal progression. Secondly, over time, if too many of these exist, it will grate on your change leaders and impact engagement.

Here’s a couple of things to walk away with:
– If you want to know whether you have sacred cows, ask people who are known for actively working to make change happen.
– Recognize that in order to engage employees in helping make your organization successful, a culture wherein anything can be constructively challenged is essential.
– When your strategies change or are further refined, things that may have been relevant yesterday, may not all be relevant tomorrow. Use the collective wisdom of your organization to identify these areas by openly asking for it. Open up hunting season for sacred cows.

Artifacts of a strategy focused organization: Usage of metrics

How your organization uses its metrics says quite a bit about your culture, management attitudes, the degree of strategy focused thinking ingrained, and the overall “hunger.” You determine a lot by asking the following question:

What happens when balanced scorecard results are made available?

Does it look more like this:
Results are made available (we can’t wait to get them so we can learn from them) -> meaningful analysis on what the results are telling us, what the drivers for the results are -> we put action in place to strengthen our performance -> accountability for results is present -> we improve continuously.

In this example, the point is not simply whether or not we hit targets (justifying past performance, to generate variable comp)… the point is to learn from them so you can improve your business. There are always both internal and external forces acting on your measures, positive and negative things are happening. Understanding these drivers and what the environment overall means is what’s truly important.

Or does it look like this:
Results are made available -> the results are presented -> limited or no actual business decisions are made based on the results

Too many organizations pay lip service to metrics, and underestimate the full value of what they can bring to the table. This is evident in organizations who report that implementation of a balanced scorecard didn’t change their business from when they didn’t use anything but financial metrics. The scorecard needs to be paired with an appropriate culture, and management processes.

Information is only useful when you use it.

Prioritizing the budget based on your strategy

As your company becomes more strategy focused, you may find that you need to handle your finance and budgeting processes differently. In many organizations, integration between budget and strategy isn’t very strong. If that’s the case for your or your client, you will want to take steps to ensure that projects that are critical for moving your strategy forward aren’t getting cut through the various rounds of budget approvals. The budget needs to enable the strategy.

A good starting point is to determine the effectiveness of your formal and informal processes today. Here are some objectives you can use to guide your assessment, or as the basis for a short online survey with managers:

1. Objective: Budget requests are prioritized according to strategic priorities
a. Questions: Will any part of your team’s 2012 plan that is critical to moving the organization’s strategy forward be compromised based on budget adjustments?

2. Objective: Teams have the resources they need to be effective
a. Questions: Does your team have the budget resources it needs to be optimally effective?

3. Objective: The overall budget process made sense, people understand how to translate their plans into numbers, didn’t result in wasted resources
a. Questions: To what extent was the 2011 budget process an efficient use of your time?
b. Questions: What level of confidence do you have that your budget is an effective translation of your team plan?

Is the focal point for alignment within reach?

Many organizations create high level strategic goals, and expect employees to figure out how to contribute to those corporate objective statements on their own. Publishing the statements without doing the hard work of translating it for people creates a false sense of security for upper management, as they are left with the comfort that the organization has a strategy. And yet if no one below you understands how to enact it… you may be further ahead to not have one but admit it.

In this environment, some beloved keeners will try to create clever linkages to close the gap, others will disengage and focus on operational and functional responsibilities, and then others will just leave. Companies that aren’t driven by a strategy don’t have the full usage of their employees. Employees can’t engage in an environment where the intended outcomes aren’t understood or compelling, and you won’t harness the discretionary effort of your team.

Symptoms:
– Strategy isn’t well understood, or isn’t seen as the most important item in discussion
– Executive is too focused on operational priorities
– Team and divisional plans focus on operations primarily, or priorities that don’t flow from the corporate level
– Alignment planning approaches change often
– Lack of consistency in planning methodologies between teams
– Lack of accountability for quality of alignment
– People don’t readily engage in planning, it is seen as being of secondary importance
– Many teams within the organization don’t have a plan or pay much attention to it

So how do you close this gap, and make your strategy accessible? Nothing but strategic clarity bridges the gap. Depending on the size and scope of your organization, the solution may look a bit different. However, the components of a well-built strategy platform clearly articulate the answers to the hard questions. It is like literally building a bridge. How big does the bridge need to be? At least as big as the gap is.

Here are some of the tools you can employ to build a bridge between strategic objectives and individual team members:

A value discipline / competitive strategy is the foundation of a strategy platform.
A strategy map explains how you intend to achieve the strategy, what drives success.
A balanced scorecard that flows directly from the strategy map translates direction into quantifiable outcomes that people can understand, impact, measure and learn from.
Division planning that uses linkages to organizational scorecard metrics (of which they impact) helps create line of sight, and often simplifies the discussion approach. (if your team contributes to 5 corporate measures that are driven from the strategy map, that’s pretty solid line of sight to how you support corporate success)

When used appropriately (in conjunction with a strategy map), the balanced scorecard helps translate the strategy to something teams can impact as well as provides quantifiable results on progress.

Essential ingreadient to make this happen?
1) A self aware, bold leadership team
2) Upper management that doesn’t shy away from the work of planning
3) People in key positions that love to think, but can turn out results
4) A culture where the ability to challenge what is for what could be is allowed

Recognizing a pivotal moment

Organizations have to periodically reinvent themselves, it’s a principle of the s-curve model. If you’re not familiar, take a second and google that. The biggest challenge in this regard is that there isn’t a gauge in a secret desk in the CEO’s office that tells you when it’s time to re-invent or begin to lose relevance… when you have peaked and it’s time to prepare to jump off to the next major phase of your evolution. A complicating factor is that everyone in your management team carries a different level of risk tolerance and willingness to engage this sort of journey.

So how do you recognize a pivotal moment? The moment when leaders need to step up and start leading the organization through a time of critical reinvention or risk the downfall of the organization. Depending on who you surround yourself with, it may come from your top leaders. It may come from data outliers in your research, or your strategy guy. It may come from the instinct of the CEO. Or it may come from the field, those on the ground with your clients. What’s MOST important is that you recognize that it will come. Knowing that it will come subconsciously prepares you to watch for it.

Business cycles in varying industries are vastly different. Some industries need to pull a rabbit out of a hat every 12 months or risk decline. For others, it’s every 10 years.

Regardless of major cycles of change, constant improvement is required in every industry, and the better you get at constant improvement the less often you need to play catch up with major S curve jump off points.