An enormous amount of time and energy gets devoted to solving problems within organizations, all under the pretence that solving those problems is the best way to achieve success, superiority, a competitive advantage and greatness. The challenge is that growing organizations are constantly changing, which inevitably leads to new and more interesting problems to solve. It’s an endless cycle of focusing on problems that means it’s impossible to solve our way to greatness.
Fortunately, there’s an alternative to the traditional problem-solving approach. Appreciative Inquiry was developed by David Copperrider and his associates at Case Western Reserve University in the mid ’80s. It focuses on doing more of what does work: uncovering the high moments in an organization’s history and using the commonalities of those experiences to build a plan to replicate those wins for the future. Sounds like more fun than constantly problem solving, doesn’t it? Here’s how it works and how it can be applied to your business.
In an effort to avoid conflict, leaders and team members often conceal their true feelings, withhold their opinions or outwardly agree and go along with the crowd while inside they are vehemently opposed.
For some, this lack of candour also extends to hoarding information or avoiding communicating with others entirely, in an effort to save face or get and stay ahead of the pack.
Strength of the strategic plan and the ability for executives to collaborate cross-silo with their teams depends considerably on trust and respect within and between teams. The willingness to come forward with authenticity and transparency is key to building up that trust and respect.
In Jack Welch’s book Winning, he describes a lack of candour as businesses’ “dirty little secret.” Continue reading
Posted in Business in Vancouver: Boardroom Strategy, leadership, learning, strategy
Tagged Authentic Leadership, candor, candour, CEO, corporate culture, culture, Good to Great, leadership
Founded by David Norton and Robert Kaplan, The Balanced Scorecard Management System has been heralded as a transformational business tool for the past 20 years.
The short version? The Balanced Scorecard management system essentially ties day-to-day activities or short-term actions to long-term strategic objectives. The approach includes two main components: a strategy map, which is a one-page diagram depicting the strategy as a hypothesis (if we do these things, we will accomplish these results); and four perspectives on managing strategy – financial, customer, internal process, and learning and growth.
Used as both a communication and management tool, the Balanced Scorecard system forms the basis for focusing an entire organization on strategy by integrating itself into critical management processes like business planning, resource allocation, performance management, and more.
Here are The Top 5 Benefits of using the Balanced Scorecard management system:
- It clearly articulates strategy in a standardized way so you can understand and communicate your company’s strategy to anyone in under 30 minutes.
- It covers critical business management considerations from four perspectives. Building strategy and measures within four scorecard perspectives – financial, customer, internal processes and learning and technology – ensures integration and alignment of business management functions. An added bonus of the four perspectives approach? Employees learn to consistently consider all four, and how they come together, at all times.
- It opens up conversations. First, because it provides a forward looking management tool that includes specific measures of success and targets that can be easily understood and cascaded down through the organization; and second, because people at all levels of the organization can have conversations where they are informed about the changes in strategic direction, making the possibilities for creative new solutions endless.
- It fosters engaged, excited and productive employees. Employees are more engaged and excited when they understand how their job supports the bigger goal – how what they do everyday contributes to the company’s vision and mission. The balanced scorecard system ensures that high-level objectives and measures are linked to the targets and measurements for individual departments, and additionally translated into personal scorecards for individual employees, building productivity and engagement at every level.
- It is flexible. The strategy map and scorecard are useful for all sizes and types of organizations. It can be used by for-profit, and non-profit organizations, as well as individuals (personal scorecards), and can be adapted for triple bottom line management requirements where the social and environmental perspectives are managed along with the financial.
If you want to learn more about The Balanced Scorecard Approach, check out, “The Strategy Focused Organization” and “Strategy Maps”, both written by Kaplan and Norton.
Mike Desjardins is the Driver (CEO) at ViRTUS (www.virtusinc.com), an organizational development consulting firm with expertise in strategic planning and implementation, leadership development, change management and succession planning for medium to large organizations. He regularly blogs at http://www.mikedesjardins.com. This column was co-authored by Tana Heminsley, a Mentor and Executive Coach at ViRTUS.
BIV Boardroom Strategy – Balanced Scorecard – March 2010
It’s during turbulent times, whether it be the current global economic situation or in times of industry or organization crisis, that CEOs have a tremendous opportunity to pull the people in their organization together towards a common goal. As Francois De La Rochefoucauld said, “there is no stronger bond of friendship than a mutual enemy.”
Here is a list of the top five things CEOs must keep in mind while leading through turbulent times:
- Simplify the strategic message. The easier the strategy is to understand and communicate the more likely it is to be understood and passed on through the entire organization. The Top 3-5 goals for the year is really what people will remember. Stephen Covey takes it one step further in his book, The Eighth Habit, when he describes the concept of a Wildly Important Goal (WIG) – the most important goal for the company for the year, as the single overarching objective that everyone in the company must be able to understand, feel compelled by, and be able to repeat and pass-on. A simple catch phrase that rallies support, the WIG is something that politicians have used to their advantage for years. Side note: Premier Gordon Campbell knows this well. At the BC Leadership Lunch last week he summed up the importance of forestry to British Columbia by saying, “wood is good.” Now I’m sure the double-entendre was intentional and I guarantee that his message was passed on.
- As Jim Collins said, Good to Great, confront the brutal facts but move forward with healthy optimism anyway. Be clear about what the situation is today, what that means for the organization, what the strategy is to move us is the right direction, and what each person can do to contribute to the success of the plan.
- Be candid and speak authentically about the reality of the situtation. Jack Welch, in chapter 2 of his book Winning, speaks about candor, or as he calls it, “the biggest little dirty secret in business.” Jack says that he felt the biggest turning point in success at GE happened when they brought all the executives together and agreed to put true candor into place in the organization. That chapter is one of the best pieces I’ve read on the value of candor in organizations.
- Keep your strategic plan dynamic. The most successful companies we work with at ViRTUS, are the ones that review, evaluate, and revise their strategic plans on a quarterly basis. Adapting the plan to changes in the market, economy, industry, company, or direct competition creates a document which decision can be made by instead of another binder on the shelf (I swear a shelf manufacturer came up with the concept of putting binders on shelves to sell more shelves.).
- Be consistent in your communications to all stakeholders. In board meetings, executive meetings, press releases, articles, newsletters, speeches, blog postings, hallway/cafeteria adhoc conversations, etc., the message must be the same.
Hear’s where the rant starts: and STOP blaming everything on the “global economic situation.” Not all of the risks you take as a CEO, even as calculated as they might seem at the time, are going to pan out. Own up to the mistakes that were made and move on. You’ll make more later so now’s the time to focus on the path forward.
At ViRTUS our Wildly Courageous Decision (WCD) is to become the Apple of the consulting world. I’ve been asked numerous times to go into more detail about the process of defining a WCD.
First off, the Wildly Courageous Decision is actually a blend of two different concepts: the Wildly Important Goal (WIG) from Stephen Covey’s book the 8th Habit and the Big Hairy Audacious Goal (BHAG) from Jim Collins’ book, Good to Great.
In crafting your WCD there are five different methods that work tend to best:
- compared to competition (Avis decided they wanted to be second to Hertz)
- compared to an absolute (The Seattle Pike Place Fish Market decided they wanted to be world famous)
- compared to an industry (We will become the leading/most admired/fastest/cheapest provider of X in the packaged goods industry)
- compared to a company you admire (ViRTUS is becoming the Apple of the consulting world)
- compared to a parent company (We will be the fastest growing/most profitable/more admired/leading brand of GE).
Here are the five criteria of a BHAG which also apply to a WCD:
- Are set with understanding, not bravado.
- Fit squarely in the three circles of your Hedgehog Concept.
- Have a long time frame—10 to 30 years.
- Are clear, compelling and easy to grasp.
- Directly reflect your core values and core purpose.
It took us a number of tries before we came up with a WCD that the entire team could rally around. The first two just weren’t inspiring us to move in the long term direction we wanted. As an entrepreneur I really had to ask myself this question as the final test of our WCD: “Am I willing to spend the next 10 to 30 years of my life to achieve this Wildly Courageous Decision?”
The CEO of one of the companies we work with asked me this question over email yesterday: “Should a short term economic condition (or is it) affect strategic direction?” I decided to share my answer since I know this question is on the minds of many CEOs, entrepreneurs, and executives right now.
Here are my thoughts:
• The Darwinian approach fits: it’s not survival of the fittest but more survival of the organism or in this case the organization that is more able to adapt to a changing environment. In a strategic sense this means reviewing the strategic plan to determine whether or not the change in the economy or economic outlook is greater or less of a force when compared to when the strategic plan was completed.
• Since the economy is a threat in more SWOT analysis’s right now the uncertainty and variability that comes along with this threat underscores the need to review the organizational strategy on a quarterly basis to ensure that any adverse effects of the economy against the strategy plan can be taken into account. It’s through this process of review, evaluating, and revising, that strategic plans become dynamic and remain relevant to things like changes in the economy. The opposite approach most often leads to the strategic plan being shelved while executives shift into reactionary mode. I think Jim Collins said it best in Good to Great when he described the Stockdale Paradox, “confront the brutal facts but maintain an unwavering faith in the endgame, and a commitment to prevail as a great company despite the brutal facts.”
• An unexplored threat that gains mindshare with executives can lead to distraction from the key initiatives that are moving the organization forward towards its long term goals. By examining the threat it can be treated with the appropriate amount of appreciative inquiry instead of potentially allowing it to become a self-fulfilling prophecy.
• The practical answer to this is to spend an hour in your next monthly executive meeting to discuss the facts and the concern the executives have about the economy to see if anything percolates through and requires adjusting the strategy. In this way the issue can be tabled, discussed, and then executives can focus on their key priorities.