The World Has Been Changing. Have You Adapted Your Business Strategy? -Part 2-

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In Part 1 of this new mini-series, you jump-started your first steps to review, assess, create and/or adapt your business strategy, to tighten its fit with changes in the business environment and customer needs. Your initial activities included information gathering and reflection on key questions, to inform your choice of your business’s Specialty from among three alternative business directions, to establish your Market Discipline or Focus.

Where Are We Going?

Now, in Part 2, you’ll have the opportunity to get a snapshot of the two proven effective, recognized tools for developing strategy and a framework for its successful execution. Today’s mini-segment provides guidance in creating your Strategy Map, and a preview of the work you’ll be doing in Part 3, developing your Scorecard. Both of these tools will be useful to achieve Lever 2, building a strong understanding of the strategy across stakeholders as well as buy-in of your internal stakeholders, your workforce.

7 Levers to Strategic Success

  1. Market Discipline or Focus
  2. Strategic Understanding & Buy-in
  3. Balanced Metrics/Performance Indicators
  4. Scorecard & Business Performance Reviews
  5. People
  6. Activities and Structure
  7. Leadership

Your Strategy Map

Two tools are especially useful to leaders in enabling performance through shared understanding. A Strategy Map is your big picture, your framework for developing and communicating your business strategy.

We’ve selected an excellent video set to help inform you and your management team about this process. The creator of this 2-video Strategy Mapping Overview is Brett Knowles, of BalancedScorecard.net.

https://www.youtube.com/watch?v=8l6PgjxZ_I4

As you can see, your Strategy Map is a multi-purpose tool, for developing, documenting and communicating your business strategy. It helps to align your organization and its people with a shared direction and common goals.

Lever 2: Strategic Understanding & Buy-in

Successfully delivering on the business strategy requires every individual, every group, every team and every leader across your organization. People need to internalize the strategy, understand their fit and contribution, and buy in.

Developing both understanding and buy-in is an evolving process over time. Strategic Understanding is built more easily and quickly accomplished through effective communication, which we’ll describe below. Building Buy-In is more complex and takes longer, but is critically important and has a powerful impact on performance.

What this means is there is much to do, day in and day out, on many fronts. It is work that is never done; Building a Strategic Understanding is essential as a foundation for Buy-in and is a pre-requisite for enabling Buy-In.

Understanding

When your people understand the business strategy they have a larger context for the work they do. They are thereby connected, as contributors, to the organization’s purpose and goals. This enables them to find more value in what they do, and to see how they can make a difference.

Without a strong understanding and connection to a purpose-driven business strategy, the ability of people to think critically or strategically, to analyze, improve and grow is limited or even hindered; people are blindly navigating a sea of seemingly autocratic or arbitrary job functions as directed by management.

Knowing how we fit into the big picture and how we make a difference informs us as we make many decisions involved in completing our work. Countless decisions are made by people throughout an organization each day. Examples include deciding how to prioritize tasks, evaluating quality, determining how to shape conversations with customers and which solutions to apply when handling customer complaints, or deciding whether to purchase capital equipment based on its speed and efficiency or its flexibility to customize a product or service. Each employee in your organization makes decisions that either contribute to, have no impact on, or that conflict with your company’s purpose and strategy.

Without having a clear understanding and connection with the business strategy, people often get sidetracked as well as making decisions and taking actions in the dark, sometimes without having information needed to consider what matters most.

Your purpose-driven Strategy aligns your people, as individuals as well as across functions and teams, with a clear, actionable shared direction. It gets everyone rowing the boat in the same top-level direction. Understanding the strategy and how one fits enables an employee to see what difference he makes in the way he does his job, and creates opportunity for the employee to find meaning in what s/he does — short and long term meaning that builds commitment and enthusiasm for the work. The stronger the understanding, the more likely it is that employees will take initiative to make a difference every day. 

To build a strong understanding of the business strategy among all employees, leaders at every level might ask themselves questions such as these:

  • Do I have a good understanding of my company’s strategy or game plan? What is my company’s strategy or game plan?
  • Does my immediate team have a good understanding of the company’s strategy or game plan? Do most employees?
  • Do most managers in our company feel it’s important for employees to have an understanding of the company’s strategy?
  • Do I believe (and do most managers believe) understanding our company’s strategy helps employees perform their jobs better?
  • Do members of my team feel a greater sense of purpose when they understand the business strategy and how they contribute to its execution?
  • Do members of my team know who the main competitors are and how we differentiate our business from the competition?

For strategic communication to be effective, leaders need to share information often, with genuine enthusiasm, using language that employees understand and can relate to their work. People need to receive information that they see as clear and actionable on the job. The Strategy and performance required by people throughout the organization in delivering it, must be part of the organization’s daily focus and discussions. Leaders can drive and sustain enduring strategic focus in many ways, such as these:

  1. Tell compelling stories from your experience or the organization’s history that explain who the customers are, why they buy from the company, how they use the products, and what makes the company different from its competitors.
  2. Leverage opportunities using lots of media — whiteboards, meetings one-on-ones, goal-setting, performance planning, larger than life postings, and Screens — to educate and update employees on performance against metrics and to show the relationship between what they do, the strategy, and the metrics.
  3. Tie bonuses and reward systems to strategic performance.
  4. Remember that on average, people forget 70% or more of information they hear, so stand-up group meetings by themselves are less effective in building understanding and retention of the information. People are also less willing to ask questions in large group sessions.
  5. Large group meetings are best followed by smaller meetings and 1x1s characterized by 2-way conversations with employees. If people cannot remember key details, this information won’t be front-of-mind, they will be unable to think or speak with certainty about the strategy and will be far less likely to initiate ideas or to use those cornerstones to guide their daily decisions or performance.
  6. Take time to teach, coach and recognize people who take action to solve problems and make improvements that positively impact strategic performance.
  7. Celebrate progress made in strategic performance areas.
  8. Use simple, everyday language and examples to be certain everyone understands and can relate to the information you provide.
  9. Involve employees by obtaining their input before making changes, by soliciting their thoughts and ideas to develop initiatives, obtaining their opinions and suggestions to identify and solve problems and to set new goals. When you don’t use their input, explain your decision.
  10. Establish teams including employees throughout the organization to identify and work on projects that contribute to success in achieving the business purpose and strategy.
  11. Invite customers make presentations for your people about what they do and how they use your products and services.

An effective Strategic Understanding positions your people to be more willing to accept management decisions and to cooperate in driving change that aligns with the strategy. It helps them to feel pride as they understand the big picture and what’s most important for the business.

So: Understanding the strategy creates a context for people. Buy-in, which is rooted in Understanding, requires a much more individualized series of Leadership actions. And it is the impact of Buy-in that is its value.

Buy-in

“What does it mean to buy in?”

To buy-in is to make a decision, a commitment. In the workplace, it’s choosing to accept and actively work toward achieving something conceived by someone else. When leaders establish a business strategy that enables employees to shape their own work-related behavior, performance, priorities, decisions and actions, in ways that result in making a meaningful difference, they buy-in.

There are two aspects to building employee buy-in to the strategy:

  • A Strategic Understanding
  • Making a Difference Through Use of Preferred Skills

To provide fulfillment at work, a job job needs to require the employee to apply skills s/he loves to use. When applying those preferred skills to contribute to goals that achieve the company’s strategy, there is joy in doing the work itself. This enables people to motivate themselves and to look forward to work. This inspires buy-in. Many jobs are not designed with this in mind, and, therefore, cannot provide meaning to the individual holding the role.

Meaning is a highly individualized concept. What provides meaning at work differs from person to person.

For many years, it was thought that just explaining the strategy, the purpose-driven strategy, to all employees, would bring about a new sense of employee engagement, satisfaction and commitment. Some organizations have implemented and sustained communication practices that explained the strategy and built a shared understanding of it throughout their organizations. But, still, the hoped-for motivation and passion for the work has not always developed as a result.

If you play this out in your mind, it becomes easier to understand what’s been missing. Leaders might ask themselves questions such as these:

  • Which roles make direct contributions to our ability to deliver on our purpose based strategy?
  • Which roles contribute indirectly?
  • Which employees are in positions requiring them to use their preferred skills?
  • Which employees are not able to use their preferred skills, because their job responsibilities require skills and knowledge that don’t give the employee satisfaction?
  • What training, career development and career-pathing options exist and are available to employees?

What leaders can do to help employees find meaning in their work is to get to know their people, in job-related areas such as their personal/career goals and preferred skills, and to use that knowledge to provide individuals with in-role assignments and training to support growth, learning and advancement. This could include short term and temporary assignments such as special projects, on-the-job training, job-sharing, and opportunities to join teams.

By investing in building both a Strategic Understanding and Buy-in, leaders can establish an infrastructure that supports a newly energizing company culture. Think about the potential benefits of doing this even on a small scale initially and building from there.

Communicating the strategy is multi-faceted, to build a deeply felt Strategic Understanding among people, one that will provide a cause that will compel each person to sign up. When people find satisfaction in being part of an organization making a difference through its purpose, simply doing the work itself can become a joyful experience and even a passion when the work involves use and ongoing development of their preferred skills.

Collectively, the Strategic Understand and Buy-in not only helps to drive performance but also enables employees to relate to common goals when facing problems, solving disagreements or conflicts and supporting organizational change.

Summary

The Strategy Map is the starting point for developing, adapting or re-creating your business strategy. It provides a known-effective perspective on what’s most important to your business success, to guide leadership thinking and decision making about the purpose/vision and direction they want to take the company.

The Balanced Scorecard takes that thinking to the next level, providing actionable detail about goals and measures. It’s function is to report on business performance, so that people can identify problems, solutions, and determine a snapshot of the company’s success or failure in its strategic performance priorities.

Next Steps

Strategic Understanding

Series Step 2: We encourage readers to focus on taking 5 actions between now and next week’s post:

Action 1: To fuel you thinking, ask yourselves questions such as these, and document your input:
  • Do I have a good understanding of my company’s strategy or game plan?
  • What is my company’s strategy or game plan?
  • Does my immediate team have a good understanding of the company’s strategy or game plan? Do most employees?
  • Do most managers in our company feel it’s important for employees to understand the company’s strategy?
  • Do I believe (and do most managers believe) understanding our company’s strategy helps employees perform their jobs better?
  • Do members of my team feel a greater sense of purpose when they understand the business strategy and how they contribute to its execution?
  • Do members of my team know who our primary competitors are and how we differentiate our business from the competition?
Action 2: Review the work you completed on the two Actions taken last week, and refine your business’s purpose and Market Discipline or Focus.

Action 3: Develop your Strategy Map.

Action 4: Review it and finalize your Strategy Map. Following is a third video that will serve as both a check-point for your Map as well as providing details that will help you think about the work we’ll focus on in Part 3, building your Scorecard.

This video is The Balanced Scorecard by Sim Institute

https://youtu.be/zf-d-O7hVhM

Action 5: Start thinking about your communication plan to build Strategic Understanding and Buy-in.

In Part 3 of this mini-series, you’ll put together the second tool, your Scorecard. You’ll begin Part 3 with a third video we’ve selected, “The Balanced Scorecard,” by IntrafocusUK, which will supplement the information provided here in Part 2, to help you develop the balanced metrics or performance indicators you’ll need, to enable tracking and monitoring. This Scorecard tool is an enabler of Execution of your strategy, and measurement of progress.

What has your company been doing to help employees to understand the business strategy and how each person contributes to achieving it? Please share your questions, results and comments with us! You’re welcome to contact us at your convenience.

In addition to doing your own research on Strategy, we suggest you check out the following reading materials. Following is a listing of resources including some created by us, some by other authors or experts.

Other segments in this mini-series

The introduction segment: “Sometimes, in business and in life, we find wisdom not in what people think, but in how they think” LINK: https://rosannamnadeau.com/2022/01/21/sometimes-in-business-in-life-we-find-wisdom-not-in-what-people-think-but-in-how-they-think/

Part 1 “The World Has Been Changing. Have You Adapted Your Business Strategy? Part 1” – Market Discipline or Focus – LINK: https://rosannamnadeau.com/2022/01/19/the-world-has-been-changing-have-you-adapted-your-business-strategy/

Part 3 “The World Has Been Changing. Have You Adapted Your Business Strategy? – Part 3” – Balanced Metrics – https://rosannamnadeau.com/2022/01/26/the-world-has-been-changing-have-you-adapted-your-business-strategy-part-3/

Part 4 – “The World Has Been Changing. Have You Adapted Your Business Strategy?” – LINK: https://rosannamnadeau.com/2022/01/30/the-world-has-been-changing-have-you-adapted-your-business-strategy-part-4/

Part 5 – “The World Has Been Changing. Have You Adapted Your Business Strategy?” – LINK: https://rosannamnadeau.com/2022/01/31/the-world-has-been-changing-have-you-adapted-your-business-strategy-part-5-2/

Additional Resources


“Driving Corporate Performance: The Balanced Scorecard,” video by Harvard Business School Executive Education.

Managers: Looking for Engaged High Performers? Design Jobs to be Loveable,” LINK: https://rosannamnadeau.com/2022/01/23/managers-looking-for-engaged-high-performers-design-jobs-to-be-loveable/

Strategy Maps: Converting Intangible Assets into Tangible Outcomes, byRobert S. Kaplan and David P. Norton

The Balanced Scorecard, by Robert S. Kaplan and David P. Norton

HBR’s 10 Must-Reads on Strategy, by Harvard Business Review

“Making Your Company an Employer of Choice,” – LINK: https://rosannamnadeau.com/2021/06/02/the-human-resources-employee-relations-function-a-hygiene-activity-or-a-strategic-value-adder/

“Is Competitive Advantage at Risk of Being Lost in the Execution of Your Strategy? – LINK: https://rosannamnadeau.com/2021/06/06/is-competitive-advantage-at-risk-of-being-lost-in-the-execution-of-your-strategy/

How the Right Metrics Can Drive Strategic Growth and ProfitabiIity – LINK: https://rosannamnadeau.com/2021/05/27/how-the-right-metrics-can-drive-strategic-growth-profitability/

The Value Chain, Strategy and Profits: A High Priority for Leaders Today – LINK: https://rosannamnadeau.com/2021/05/26/the-value-chain-strategy-profits-a-top-priority-for-leaders-today/

The Truth About Trust, Engagement and Organization Performance – LINK: https://rosannamnadeau.com/2021/05/11/the-truth-about-trust-engagement-and-organization-performance/ 

The Critical, Company-Wide Need for Strategic Thinking in Today’s Organizations – LINK: https://rosannamnadeau.com/2021/10/23/the-critical-unmet-need-for-strategic-thinking-in-todays-organizations/

Manufacturing Metrics and the Yellow Brick Road – LINK: https://rosannamnadeau.com/2021/06/02/manufacturing-metrics-and-the-yellow-brick-road/

“Chipotle’s CEO Boosted Revenue by 2 Billion Using These 2 Simple Techniques Any Business Can Use Them,” – LINK: en/chipotles-ceo-boosted-revenue-by-2-billion-using-these-2-simple-techniques-any-business-can-use-them.html

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