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The Six Disciplines Blog


Friday, February 28, 2014

To Understand Strategy, Look At What People Are Doing

Here’s a profound observation from management guru, Gary Hamel:

“If you want to understand the real strategy, look at what people are doing!”

Indeed, more often than not, there are disconnects or gaps between the strategy that is formulated by the senior leadership team, and how the strategy is executed by the rest of the workforce.

Why the gaps?

Could be for a number of reasons:

  • The strategy is not accessible/available to the workforce
  • The strategy is not sound
  • The strategy is not well understood

Most likely, the recognition and reward system that drives the daily activities and behaviors of each person in the workforce is not aligned with the strategy of the organization. How to combat this situation?

  1. Make the strategy as transparent as possible. The mission, vision, values and strategic position of the organiztion MUST be transparent and available to everyone within the organization.
  2. Establish Vital Few Objectives (VFOs). Most organizations have 2 to 5 times as many projects and initiatives going on than they can possibly address. Reduce the number of key objectives. Keep the VFOs simple – financial, customer, production, people – and let everything else go. Be very focused on a few things, and do them well.
  3. Make the VFOs measurable. Define measures, targets, and create a small number of initiatives that support the VFOs. Assign responsibility and accountability to someone for each VFO.
  4. Define an Individual Plan for each person. On a quarterly basis, develop a plan for every individual, assigning activities from each initiative. Have each person track time and progress toward achieving the stated outcomes. Measure progress and update status weekly.
  5. Align recognition and rewards based on the achievement of outcomes. Recognition and rewards systems are not to be based on activities, but results.

BOTTOMLINE: What people spend time on should be based on how well your strategy, goals and initiatives are articulated. Reward and recognize workers based on how well goals were achieved (results), not on how much activity took place.

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Since 2005, the Six Disciplines blog offers posts about performance excellence, strategy execution, business coaching, leadership development, innovation, and business process improvement. This blog has received prestigious awards for leadership and management and has been syndicated by several major media sources.