If you have read KPI Paradigm Shifts of PuMP #1, #2, #3, skip this intro and scroll down to today’s article. If you haven’t, here is the link that introduces our 5-part blog series, inspired by the Paper published by the United Nations Economic Commission for Europe, about how they used PuMP to measure the value of official statistics and the paradigm shifts they experienced. (Full series context)
Imagine your organization is a system like the human body. How might this change your approach to strategy execution?
In the context of our bodies, a system is a grouping of varying numbers and kinds of organs, so arranged that together they perform complex functions for the body. When one organ fails to work properly, it impacts other organs within the system. The same can be said for our organizations. What one business unit improves or changes, has impacts somewhere else.
What does this system-thinking mean for strategic alignment?
System-thinking means that each part of an organization has a unique role to play in contributing to the success of the whole. For each part of the organization to be aligned to the success of its purpose, vision, and strategic goals, we need to understand each unit’s unique cause-and-effect connection.
The mini-me approach to alignment.
A common method to get alignment to the organization’s strategic direction is to make sure each team or business unit is focused on its own mini-version of the corporate strategy and scorecard. In other words, when the strategic goals are cascaded, they are copied, then pasted (maybe with a bit of editing) into each team’s “alignment framework”.
For example, if the executive had goals that included reducing costs, increasing diversity, and reducing their carbon footprint, then each business unit would have a version of these same goals in their cascaded strategy and measurement.
Why this approach fails.
Cutting and pasting a part of our liver throughout our body in hopes of improving the quality of blood just doesn’t work, and it won’t work in your organization either. This is not how systems work. In our bodies, our skin, our lungs, our bones, our brain – every part of us contributes something unique to the success of our whole being in a cause-and-effect relationship. If we want to have more meaningful alignment within organizations, we must think the same way because each part of the organization has a unique contribution to the achievement of the strategy.
Leadership must change its thinking when it comes to alignment within an organization.
Leaders must look for where their business unit can have the greatest impact and only focus their strategy alignment efforts there. This unique leverage is the power of cause-and-effect thinking vs. the mini-me copy and paste version. Cause-and-effect thinking creates an organization-wide framework that makes sure each team has articulated its unique role in improving specific strategic goals, and then measuring what matters most to prove that this unique role is positively impacting the organization’s success.
Wondering if your organization is stuck in attempting to align teams with a mini-me version of the strategy?
Look for these symptoms…
The symptoms that your organization has not yet made this paradigm shift and is still stuck in driving alignment with the mini-me cascade approach, often sound like this….
Symptom #1: Every business unit and team scorecard are mini versions of the corporate scorecard.
You will recognize this symptom in the workplace when you review each team’s scorecard and can feel that the logic for the team is missing. You can see the business unit is struggling to figure out how to connect its work to the mission, mandate, vision, and purpose of the organization.
Symptom #2: Business units and teams complain that their goals and KPIs are not relevant to what they feel is their most important work.
Imagine there is a goal to reduce costs and another goal to create more innovative services. The team that has the responsibility to create those innovative services will feel torn if they also have to reduce their costs at the same time. And, what about the teams that don’t create services for external customers? Do they try and create innovative services for their internal customers? All of them?
Symptom #3: Business units and teams don’t really understand the organization’s strategy.
Just because they have their own version of the strategy, doesn’t mean a team understands how the content was developed or what it even means. The strategy is likely written in corporate jargon and fuzzy language, making it open to interpretation, and thus almost impossible to effectively align their own priorities to.
Beware of quick fix-thinking for the organization-wide issue of aligning skills, resources, and energy to strategic change. Just like the systems in our bodies, we need to consider where the strengths in our system lie, relative to each strategic priority.
Ready to shift the paradigm from aligning with the copy-paste approach to exploring causes-and-effects within the organization?
Use these Questions to Trigger Conversations and Inspire Change
Question #1: For each of the organization’s strategic goals, which business unit or team has the most significant impact on achieving it?
- Does it make sense that every team has the same or even a noticeable impact on every single strategic goal?
- Or is it more likely that each will have their own part, depending on the purpose of the business unit?
- Does alignment make more sense when the nature of the work that teams perform naturally impacts one or two strategic goals more than other goals?
Question #2: How much more ownership would come from business units and teams if they create their own goals and KPIs – ones that have the largest direct impact on the achievement of corporate goals?
- Is the organization’s strategic direction clear, focused, and understandable enough for teams to easily develop their own goals, with measures that align in a clear and logical way to what matters most?
- Will business units have more ownership and commitment to change if we trust them to articulate their unique part in aligning their work to strategy?
Question 3: Have we seen examples in our organization where a team had success by demonstrating how their work and goals linked to 1-2 corporate goals?
- Can taking an Appreciative Inquiry approach to finding where alignment has gone well in the past, help us facilitate change across the organization?
- Could we start with one business unit or team, and empower them to build their alignment to the corporate strategy, as a model for others to be inspired and follow?
Paradigm shifts don’t happen overnight!
Start by reflecting on the skills, capabilities, and processes you may need to improve so that your organization can change and succeed. Then take your first step in building them.
Upcoming in this series:
- July: Paradigm Shift #5: Measurement processes must be built-in, not bolted-on.
Did you miss the previous blogs in this series?